political economy (unit 4)

Question 1

political economy

Answer 1

study of how politics and economy are connected

Question 2

market

Answer 2

interaction between the forces of supply and demand
exchange of goods between buyers and sellers

Question 3

property

Answer 3

ownership of the goods and services exchanged through markets

Question 4

public goods

Answer 4

goods provided by the state that are available for society, indivisible- no one can own them (roads, healthcare, education…)

Question 5

social expenditures

Answer 5

states provision of public benefits (education, wealth care, transportation…)- welfare

Question 6

central bank

Answer 6

institution that controls how much money is flowing through the economy, how much it costs to borrow money in that economy

Question 7

inflation

Answer 7

increase in overall prices in the economy when demand outstrips supply

Question 8

hyperinflation

Answer 8

inflation that is higher than 50% a month for more than 2 months in row

Question 9

deflation

Answer 9

too many goods are changing too little money
dropping prices

Question 10

regulations

Answer 10

rules that set the boundaries of a given procedure

Question 11

monopoly

Answer 11

market controlled by a single producer

Question 12

tarrifs

Answer 12

taxes on imported goods

Question 13

quotas

Answer 13

limit the quantity of a good coming into the country

Question 14

nontariff regulatory barriers

Answer 14

restriction in order to protect state citizens and make it difficult for foreign goods in the local market

Question 15

comparative advantage

Answer 15

ability to produce particular good/service more efficiently than other countries

Question 16

laissez-faire

Answer 16

economy should be allowed to do what it wishes

Question 17

capitalism

Answer 17

system of private property and free markets

Question 18

mercantilism

Answer 18

focuses on the needs of the state
domestic economy generates power

Question 19

parastatals

Answer 19

full state ownership of specific industries

Question 20

gross domestic pruduct (GDP)

Answer 20

total market value of goods and services in one country during one year

Question 21

purchasing power parity (PPP)

Answer 21

buying power of income in each country by comparing similar costs

Question 22

gini index

Answer 22

mathematical formula that measures the amount of economic inequality in a society
0-100 (greater number greater inequality)

Question 23

human development index (HDI)

Answer 23

amount of wealth in society and income, health, life expectancy, education

Question 24

consumer price index (CPI)

Answer 24

price of average market basket of consumer goods and services purchased by households

Question 25

economic liberalization

Answer 25

cutting taxes, reducing regulation, privatizing state owned businesses and public goods, expanding property rights

Question 26

pluralism

Answer 26

people of different races, religions live together in society

Question 27

neocorporatism

Answer 27

a system of policy making involving the state, labour, business

Question 28

protectionism

Answer 28

government support industries in its own state by taxing and restricting foreign goods