UNIT 3 Flashcards
Autocracy
state goverened by a single individual or a small group of people with unlimited power
Business cycle
Economies contracting and expanding over time (recession, trough, expansion, peak)
Recession
The economy slows down- two consecutive quarters during which the growth GDP declines (decline in consumer purchasing, increase in unemployment)
Trough
Bottom of the cycle-production and employment reach their lowest levels
-at this point the economy completes recession and turns toward prosperity
Expansion
The economy begins to grow again- employment, wages, production and profits all expand
-Investments are strong, new businesses are created, and the economic climate is good
Peak
Top of business cycle- economy stops expanding and begins contracting
Centrally planned economy/communism/command economy
The government-controls elements of economy and how income is distributed
- provides education, healthcare, employment and housing to all members of society
- Ownership of private property is restricted, profit belongs to government, competition is limited
Coincident indicators
Move in conjunction with the business cycle (international trade)
Democracy
Government through elected representatives, characterized by free and fair elections, the rule of law, free speech, right to assembly, a free press, and freedom of religion
Developed economies
Characterized by high per capita income and GDP, high standards of living, high literacy rate, advances in healthcare and technology, rely less on primary industries and more on tertiary industries, strong trade alliances
Developing economies
- Moving away from agriculture and natural resources toward more industrialization, manufacturing, and technology
- characterized by lack of social services (healthcare and education), poor infrastructure and low literacy levels
Economic system
The way a country organizes its resources and distributes goods and services to its citizens
Economies in transition
- Moving from centrally planned toward market economic system (still mixed)
- Transition includes decreasing role of the government and privatization
- Possible problems like inflation, increased unemployment, widening income gaps
EU
- Political and economic union
- EU members are party to a trade agreement encompassing 28 countries in Europe (as of 2018) and a population of almost half a billion people
- Has its own flag, anthem, and currency
- Has common financial, security, and foreign policies
Fiscal policies
The way the government at all levels (municipal, provincial, federal) collects and spends money