Unit 3: Chapter 4 - Economics & Politics Flashcards
What is the definition of economics?
The study of how people make decisions in a world where wants are unlimited but resources are limited.
What is a market economy?
An economic system determined by free competition where businesses, consumers, and government act independently.
What are the characteristics of a market economy?
1) Corporations and people are encouraged to own private property
2) Profit belongs to business owners
3) Companies compete based on quality, services, price, reputation, and warranties
4) Consumers have greater selection
5) Companies have an incentive to innovate
What is a centrally planned economy?
An economic system where the government controls all elements of the economy, including prices, wages, and production.
What are the characteristics of a centrally planned economy?
1) AKA communism or command economy
2) Government controls all elements of the economy, including prices, wages, and production
3) Government provides education, health care, employment, and housing to all members of society
What is a mixed economy?
An economic system that combines government intervention and private enterprise.
What are the characteristics of a mixed economy?
1) AKA modified free enterprise system
2) Falls between a market economy and a centrally planned economy
3) Combines government intervention and private enterprise
What is a traditional economy?
An economic system where traditions and customs govern economic decisions.
What are the characteristics of a traditional economy?
1) Traditions and customs govern economic decisions
2) Economic activities are usually centred toward the family, tribe, or ethnic group
3) Resources are allocated based on inheritance
4) Farming, hunting, and gathering are done largely in the same fashion as the generation before
What is a political system?
The type of government by which a country is run.
What are the different types of political systems?
1) Democracy
2) Autocracy
3) Theocracy
4) Monarchy
5) Aristocracy
What is a democracy?
A state governed by all eligible members of the population through elected representatives.
What are the characteristics of a democracy?
1) Free and fair elections
2) Rule of law
3) Free speech and press
4) Right to assembly
5) Freedom of religion
What is an autocracy?
A state governed by a single individual or a small group of people with unlimited power.
What are the characteristics of an autocracy?
1) Strong military presence
2) Controls all aspects of citizens’ lives
3) Citizens have no influence on government
How do corporations influence governments?
1) Contributing large amounts to political campaigns
2) Participating in trade missions with politicians
3) Pressuring government to change or adopt beneficial policies
What is lobbying?
The process through which companies, special interest groups, or individuals attempt to influence government officials to endorse public policy favorable to these groups
Give an example of a powerful lobbying group in the United States.
The NRA (National Rifle Association) is
a powerful group in the United States that lobbies the
government on gun-control issues.
What are some of the ways government affects international trade and business?
1) Establishing import and export laws
2) Setting tariffs
3) Maintaining membership in trade organizations and negotiating trade agreements
4) Determining monetary policy, including currency exchange rates
5) Determining fiscal policy, including taxation laws
6) Building infrastructure, such as roads and sewer systems
What are underdeveloped countries also referred to as?
Least-developed or third-world countries
What characterizes developed countries?
1) High reliance on secondary and tertiary industries
2) High standards of living
3) High literacy rates
4) Major advancements in health care and technology
What are developing countries characterized by?
1) Improved literacy rates
2) Increased access to health care and social services
3) Technological advancement
4) A move to manufacturing base
5) Population moving from rural areas to cities
What are the characteristics of underdeveloped countries?
1) Severe poverty
2) Lack of social services
3) Poor infrastructure
4) Low literacy
5) Limited access to technology
6) Agriculture- or resource-based economies
7) Long-term political issues
Developed countries are also known as _______.
Industrialized or first-world countries
