D270 ch 4

Vocabulary flashcards covering key concepts, classifications, economic systems, and analytical indicators of the international economic environment.

Economic System

The organizational framework that governs the production, distribution, and consumption of goods and services within a nation.

Developed Economy

An economy characterized by high income levels, advanced infrastructure, sophisticated financial systems, and high technology, accounting for approximately $16\%$ of the global population (1.3 billion people).

Developing Economy

An economy with low income levels, limited credit access, nascent infrastructure, and heavy reliance on agriculture or low-end manufacturing, accounting for approximately $32\%$ of the global population (2.7 billion people).

Emerging Economy

A developing economy experiencing rapid industrialization, accelerating GDP growth, market liberalization, and an expanding middle class, accounting for approximately $52\%$ of the world's population (4.3 billion people).

Big Emerging Markets (BEMs)

A group of developing nations that share distinctive traits including large territory, substantial populations, significant natural resources, rapid market growth, and major infrastructure needs.

BRICS

An acronym standing for Brazil, Russia, India, China, and South Africa.

Economic Freedom

The degree to which individuals and managers can use their initiative, effort, and competencies without government coercion.

Rule of Law (Economic Freedom Pillar)

A primary pillar category of the Index of Economic Freedom that evaluates property rights, judicial effectiveness, and freedom from corruption (government integrity).

Limited Government (Economic Freedom Pillar)

A primary pillar category of the Index of Economic Freedom that evaluates tax burden, government spending, and fiscal health.

Regulatory Efficiency (Economic Freedom Pillar)

A dimension of the Index of Economic Freedom comprised of business freedom, labor freedom, and monetary freedom.

Open Markets (Economic Freedom Pillar)

A dimension of the Index of Economic Freedom comprised of trade freedom, investment freedom, and financial freedom.

Command Economy

An economic system anchored philosophically in communism, where the government owns most resources and directs allocation through central planning and collectivism ('the visible hand').

Market Economy

An economic system anchored philosophically in capitalism, where resource allocation and prices are driven by consumer supply and demand through decentralized private decisions ('the invisible hand').

Mixed Economy

An economic system combining private and public ownership in varying proportions, balancing market efficiency with state oversight and anchored philosophically in socialism.

State Capitalism

An economic model where political officials guide commercial activities and shape asset values using state-owned enterprises.

National Champions

State-supported domestic corporations provided with low-cost capital and market protection to compete globally under state capitalism.

Gross National Income (GNI)

The total market value of all goods and services produced by the domestic economy plus net income received from other countries, measuring ownership-based income.

Gross Domestic Product (GDP)

The total market value of all output produced within a country's physical borders, regardless of domestic or foreign ownership, measuring location-based output.

Shadow Economy

Unrecorded, informal, or illegal economic activity that is not captured in official GDP or GNI statistics.

Purchasing Power Parity (PPP)

The number of units of a country's currency required to buy the exact same basket of goods and services in the domestic market, controlling for cost-of-living differences and exchange rate distortions.

The Big Mac Index

An informal metric that uses the price of a standard fast-food item to explain purchasing power parity differences across borders.

Green Economics

An economic perspective asserting that an economy is linked to the natural environment and measuring performance by accounting for environmental and resource depletion costs.

Net National Product (NNP)

An output metric that measures the depletion of natural resources and environmental degradation by depreciating a country's natural assets alongside standard economic output.

Genuine Progress Indicator (GPI)

An economic metric that adjusts GDP by adding unpaid household and volunteer labor while deducting costs associated with environmental degradation, crime, and social problems.

Human Development Index (HDI)

A composite index measuring three primary dimensions: longevity (life expectancy at birth), knowledge (literacy rate and school enrollment), and standard of living (GNI per capita at PPP).

Happynomics

An economic evaluation approach that incorporates subjective metrics of life satisfaction, emotional well-being, and social conditions rather than monetary output alone.

Global Competitiveness Index (GCI)

An index produced by the World Economic Forum (WEF) that measures national competitiveness, defined as the set of institutions, policies, and productivity factors determining a country's level of productivity.

Global Innovation Index (GII)

An index that evaluates a country's innovation landscape by balancing innovation inputs against innovation outputs.

Balance of Payments (BOP)

An accounting summary of a country's economic transactions (trade and financial flows) with the rest of the world over a specified period.