SS30 Vocabulary Quiz #3

Scarcity

The central problem of economics; unlimited wants and limited resources.

Free Market Economy

An economic system that operates with limited government intervention

Command Economy

- An economic system based on public (state) ownership of property in which government planners decide which goods to produce, how to produce them, and how they should be distributed

Mixed Economy

An economy in which private enterprise exists in combination with a considerable amount of government regulation and programs.

Business Cycle

A pattern of alternating periods of economic growth (booms) and decline (busts).

Law of Demand

the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises

Law of Supply

the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises

Adam Smith

His inquiry into the Nature and Causes of the Wealth of Nations was one of the earliest attempts to study the historical development of industry and commerce in Europe. That work helped to create the modern academic discipline of economics and provided one of the best known intellectual rationales for free trade and capitalism

John Maynard Keynes

radical ideas had a major impact on modern economic and political theory as well as Franklin D. Roosevelt's New Deal. He is particularly remembered for advocating interventionist government policy, by which the government would use fiscal and monetary measures to aim to mitigate the adverse effects of economic recessions, depressions, and booms. He is considered to be the founder of macroeconomics.

Welfare State

A social system in which the state assumes primary responsibility for the welfare of its citizens in matters of health care, education, employment, and social security. This requires significant government revenue through taxes and increases government intervention in the economy.

Welfare Capitalism

Companies and business owners provide incentives to build better relationships with employees, while still making a profit; (e.g. health insurance, safety standards, buying stock in the company(stock options))

Supply Side Economics

A right-wing economic idea as a way to encourage economic growth by lowering general taxation and deregulation.

Demand Side Economics

A school of economic thought that tends to favor active federal government policymaking to stabilize economy-wide fluctuations and increase demand, usually by increasing spending, decreasing taxes, and incurring a deficit.

Liberalism

A collection of ideologies all committed to the principle of the dignity and freedom of the individual as the foundation for society.

Private Property

property owned by individuals or companies, not by the government or the people as a whole

Public Property

any item or land that is owned by the government and therefore the people as a whole.

Classical Liberalism

was an ideology based on the belief that the rights and freedoms of the individual should be the foundation for society. It was largely embraced during the 1800's in Europe, especially in its emphasis on a capitalist free-market economy.

Modern Liberalism

an ideology that developed over time to address concerns with the inequality and injustices created by a capitalist society while remaining focused on individual rights

Progressivism

- A 1920s movement in the united states, usually associated with president Theodore Roosevelt, that reacted to the perceived abuses of laissez - Faire, capitalism by large corporations.

Reactionary

Ideological view that favours a return to a previous state of affairs. Willing to to go to violence to achieve it.

Radical

favoring fundamental or extreme change to the left. Willing to result to violence to achieve it.

The New Deal

President Franklin Roosevelt's programs to combat economic depression. Included a number of social insurance measures and used government spending to stimulate the economy; a switch from classical to modern liberalism and the beginning of the modern welfare state.

The Great Depression

an economic crisis that began with the stock market crash in 1929 and continued through the 1930's. During this time, banks failed, factories closed, many people became unemployed, and international trade declined.

Monetary Policy

The government's ability to control interest rates and the money supply.

Fiscal Policy

Relates to government control over taxing and spending.

John Stuart Mill

A naturalist, a utilitarian, and a liberal, whose work explores the consequences of a thoroughgoing empiricist outlook. In doing so, he sought to combine the best of eighteenth-century Enlightenment thinking with newly emerging currents of nineteenth-century Romantic and historical philosophy. Also an advocate of Universal Suffrage.

Utlitarianism

An ethical theory that states that the best action is the one that maximizes the well-being of sentient entities or in other words the doctrine that an action is right insofar as it promotes happiness, and that the greatest happiness of the greatest number should be the guiding principle of conduct..

interest Rates

the proportion of a loan that is charged to the borrower, typically expressed as an annual percentage of the loan outstanding.

deficit

A term that means your expenses exceed your income. This is tolerable in the short-term for a Keynesian economist.

Stagflation

a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation)

deregulate

To remove government rules and controls from some types of business activity. Usually a tool of right-wing economists.

Nationalization

Government takes over existing private companies and runs them as state-owned enterprises.

Lassiez Faire

idea that government should stay out of business and economic affairs as much as possible

Trickle Down Economics

Hoover's strategy battling the Great Depression in which the money is given to the big corporations and eventually they will pay their workers more, and then the workers will spend their money and save the economy.

bank run

When too many depositors try to withdraw their savings from a financial institution, causing it to go bankrupt

consumerism

a movement advocating greater protection of the interests of consumers

Inflation

A rise in the general level of prices in an economy. This makes money worth less over time.

Invisible Hand

A phrase coined by Adam Smith to describe the process that turns self-directed gain (self-interest) in a free-market system into social and economic benefits for all.

Capitalism

an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

Communism

A theory or system of social organization based on the holding of all property in common, actual ownership being ascribed to the community as a whole or to the state.