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Economics
The study of how society employs resources to produce goods and services for consumption among various groups and individuals Two Branches:Macroeconomics Microeconomics TERM 2
Malthus believed
DEFINITION 2 That if the rich had most of the wealth and the poor had most of the population, resources would run out TERM 3
Neo-Malthusians believe
DEFINITION 3 There are too many people in the world and believe the answer is radical birth control TERM 4
Smith believed that:
DEFINITION 4 Freedom was vital to any economys survival Freedom to own land or property and the right to keep the profits of a business is essential People will work hard if they believe they will be rewarded TERM 5
Invisible Hand
DEFINITION 5 When self-directed gain leads to social and economic benefits for the whole community
Capitalism
All or most of the land, factories and stores are owned by individuals, not the government, and operated for profit TERM 7
CAPITALISMS FOUR BASIC RIGHTS
DEFINITION 7 The right to own private property The right to own a business and keep all that business profits The right to freedom of competition The right to freedom of choice TERM 8
ROOSEVELTS FOUR ADDITIONAL RIGHTS
DEFINITION 8 Freedom of speech and expression Freedom to worship in your own way Freedom from want Freedom from fear TERM 9
Free Market
DEFINITION 9 Decisions about what and how much to produce are made by the market TERM 10
Supply
DEFINITION 10 The quantities of products businesses are willing to sell at different prices
SOCIALISM BENEFITS
Social equality Free education Free healthcare Free childcare Longer vacations Shorter work weeks Generous sick leave TERM 17
The NEGATIVES of SOCIALISM
DEFINITION 17 Few incentives for businesspeople to take risks; Brain Drain: Some of a countries best and brightest workers (i.e., doctors, lawyers and business owners) move to capitalistic countries; Fewer inventions and innovations because the reward is not as great as in capitalistic countries TERM 18
Communism
DEFINITION 18 An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production. Prices dont reflect demand which may lead to shortages of items, including food and clothing Most communist countries today suffer severe economic depression and citizens fear the government TERM 19
Free-Market Economies
DEFINITION 19 The market largely determines what goods and services are produced, who gets them, and how the economy grows TERM 20
Command Economies
DEFINITION 20 The government largely determines what goods and services are produced, who gets them, and how the economy will grow
Gross Domestic Product (GDP)
Total value of final goods and services produced in a country in a given year TERM 22
Unemployment Rate
DEFINITION 22 The percentage of civilians at least 16-years-old who are unemployed and tried to find a job within the prior four weeks TERM 23
Four Types of Unemployment:
DEFINITION 23 Frictional Structural Cyclical Seasonal TERM 24
Inflation
DEFINITION 24 The general rise in the prices of goods and services over time TERM 25
Disinflation
DEFINITION 25 When the price increases are slowing (inflation rate declining)
National Deficit
The amount of money the federal government spends beyond what it gathers in taxes TERM 32
National Surplus
DEFINITION 32 When government takes in more than it spends TERM 33
National Debt
DEFINITION 33 The sum of government deficits over time TERM 34
Monetary Policy
DEFINITION 34 The management of the money supply and interest rates by the Federal Reserve Bank (the Fed)
