Section 2

Question 1

The Bourgeois

Answer 1

a member of the middle class; a person whose political, economical and social opinions are believed to be determined mainly by concern for property values

Question 2

Proletariat

Answer 2

Working-class people (not the poor)

Question 3

Karl Marx

Answer 3

1. 1818-1883
2. German philosopher, economist, political theorist, historian
3. Born and married into a bourgeoisie family
4. Communist manifesto

Question 4

Marxism

Answer 4

A branch of socialism; a theory that the more powerful classes oppress and exploit the less powerful by denying their fair share of the money and surplus they make.

Question 5

Socialism

Answer 5

1. Top to bottom system
2. the political and economic theory that advocates that the means of production, distribution, and exchange should be owned by the community as a whole.

Question 6

Communism

Answer 6

1. Bottom to the top system
2. a political theory derived from Karl Marx, advocating class war and leading to a society where all property is publicly owned and each person works and is paid according to their abilities and needs.

Question 7

“The Fall of Capitalism”

Answer 7

Suggests profits come from exploited labor (key to capitalism for Marx)

Question 8

Subsistence (Fall of Capitalism)

Answer 8

payment to labor just enough to keep them alive

Question 9

Constant capitalism (Fall of Capitalism)

Answer 9

capitalists, factories, and equipment

Question 10

Variable capital (Fall of Capitalism)

Answer 10

labor costs

Question 11

Surplus value (Fall of Capitalism)

Answer 11

payment robbed from labor

Question 12

5 laws of tendencies that point to economic implosion

Answer 12

1. Falling profit rates and accumulation of capital
2. Increasing concentration of economic power
3. Deepening crises and depressions
4. Industrial reserve army
5. Increasing misery of the proletariat

Question 13

Marginalism

Answer 13

• the study of marginal theories and relationships within economics.
• How much extra use is gained from incremental increases in the number of goods created, sold, etc. and how these measures relate to consumer choice and demand.

Question 14

What does Marginalism declare?

Answer 14

The past is behind you.

Question 15

Law of Demand

Answer 15

• Other factors being constant, price and quantity demanded of any good and service are inversely related to each other.
• When the price of a product increases, the demand for the same product will fall

Question 16

Elasticity

Answer 16

A Measure of a variable’s sensitivity to a change in another variable

Question 17

Institutionalism

Answer 17

school of economics that flourished in the United States during the 1920s and 30s. It viewed the evolution of economic institutions as part of the broader process of cultural development

Question 18

Conspicuous Consumption:

Answer 18

A means to show one’s social status, especially when the foods and services publicly displayed are too expensive for other members of a person’s class.

Question 19

3 factors for determining negligence

Answer 19

1. Probability of injury (P)
2. The extent of injury or loss (L)
3. Cost of preventing an accident (C)

Question 20

Keynesian Economics

Answer 20

An economic theory of total spending in the economy and its effects on output and inflation.

Question 21

Two Basic Propositions of Keynes

Answer 21

1. The private economy may not reach full employment

2. Government spending can spur the economy into filling the gap

Question 22

Marginal Propensity to Consume

Answer 22

the proportion of an aggregate raise in pay that a consumer spends on the consumption of goods and services, as opposed to saving it.

Question 23

Monetarism

Answer 23

A macroeconomic concept, which states that governments can foster economic stability by targeting the growth rate of the money supply.

Question 24

3 major tools of the Fed

Answer 24

1. Sets the reserve ration
2. Lends to other banks and sets discount rates
3. Open market operations

Question 25

Keynes Car

Answer 25

national economy as an automobile

Question 26

Money

Answer 26

Anything that is generally accepted in exchange for goods and services.

Question 27

3 functions of money

Answer 27

1. Medium of exchange
2. Unit of account
3. store of value

Question 28

Types of Money

Answer 28

1. M1- Cash in circulation and in checking accounts
2. M2- M1 plus other deposits, including savings, CD’s and money market accounts
3. M2 plus long term deposits

Question 29

Superstructure

Answer 29

the ideologies that dominate a particular era, all that “men say, imagine, conceive,” including such things as “politics, laws, morality, religion, metaphysics, etc.”

Question 30

Dependence Effect

Answer 30

The market doesn’t read the consumer’s true demand for goods; it reads artificial desires implanted by manipulating advertisers.

Question 31

Conspicuous Leisure

Answer 31

Engaged in for the sake of displaying and attaining social status.

Question 32

Velocity of Money

Answer 32

A rate that money turns over each year.

Question 33

Quantity Theory

Answer 33

(MV=PQ)

Question 34

MV=PQ

Answer 34

M is the money supply
V is velocity
P is price
Q is the quantity of goods & services produced