political economy (unit 4) Flashcards
political economy
study of how politics and economy are connected
market
interaction between the forces of supply and demand
exchange of goods between buyers and sellers
property
ownership of the goods and services exchanged through markets
public goods
goods provided by the state that are available for society, indivisible- no one can own them (roads, healthcare, education…)
social expenditures
states provision of public benefits (education, wealth care, transportation…)- welfare
central bank
institution that controls how much money is flowing through the economy, how much it costs to borrow money in that economy
inflation
increase in overall prices in the economy when demand outstrips supply
hyperinflation
inflation that is higher than 50% a month for more than 2 months in row
deflation
too many goods are changing too little money
dropping prices
regulations
rules that set the boundaries of a given procedure
monopoly
market controlled by a single producer
tarrifs
taxes on imported goods
quotas
limit the quantity of a good coming into the country
nontariff regulatory barriers
restriction in order to protect state citizens and make it difficult for foreign goods in the local market
comparative advantage
ability to produce particular good/service more efficiently than other countries
laissez-faire
economy should be allowed to do what it wishes
capitalism
system of private property and free markets
mercantilism
focuses on the needs of the state
domestic economy generates power
parastatals
full state ownership of specific industries
gross domestic pruduct (GDP)
total market value of goods and services in one country during one year
purchasing power parity (PPP)
buying power of income in each country by comparing similar costs
gini index
mathematical formula that measures the amount of economic inequality in a society
0-100 (greater number greater inequality)
human development index (HDI)
amount of wealth in society and income, health, life expectancy, education
consumer price index (CPI)
price of average market basket of consumer goods and services purchased by households
economic liberalization
cutting taxes, reducing regulation, privatizing state owned businesses and public goods, expanding property rights
pluralism
people of different races, religions live together in society
neocorporatism
a system of policy making involving the state, labour, business
protectionism
government support industries in its own state by taxing and restricting foreign goods
