The Economy & Government

This set of flashcards covers key vocabulary and concepts from the lecture on the economy and government.

Economic Incentives

Rewards that influence citizen and producer behavior by providing financial motivation.

Exports

Goods made in one country that are sold to another country.

Imports

Goods made in other countries that are brought into a country to be sold.

Tariff

A trade barrier or tax on imported goods.

Domestic Trade

Trade where the buyer and seller are in the same country.

Free Trade

The removal of all trade barriers, including tariffs.

NAFTA

North American Free Trade Agreement.

Tax Breaks

Reductions in taxes provided by the government to encourage certain behaviors or investments.

Tax Write-Offs

Deductions individuals can make for donations or investments from their taxable income.

Subsidies

Monetary support given by the government to help companies remain competitive.

Entrepreneurship

The activity of starting and running new businesses, often encouraged by government incentives.

Patents

Legal protections for inventions that prevent others from producing the same idea for a certain period.

What are financial incentives in Economic Incentives?

Money rewards or penalties that influence behavior.

What are consumer incentives?

Rewards that encourage people to buy more, like discounts.

What are producer incentives?

Rewards that motivate businesses to produce more or better goods.

What is the purpose of Tariffs?

To protect local businesses and earn government money.

How does Free Trade help consumers?

It usually lowers prices and offers more product choices.

What are the benefits of NAFTA?

It reduces trade barriers and helps countries work together economically.

What do Tax Breaks encourage?

They encourage people to invest in businesses or donate to charities.

How do Tax Write-Offs help individuals?

They lower the amount of money taxed, reducing tax bills.

What is the effect of Subsidies on competition?

They give certain companies a financial advantage in the market.

What defines Entrepreneurship?

Starting and managing new businesses, often with new ideas.

How do Patents encourage innovation?

They give inventors exclusive rights, motivating them to create new things.

What drives individuals to make purchasing decisions?

Economic incentives such as discounts or rewards can drive purchasing decisions.

Can you explain how consumer incentives work?

Consumer incentives are rewards like discounts that encourage people to buy more.

Why might a government impose tariffs on imported goods?

Tariffs are imposed to protect local businesses and generate revenue for the government.

How does free trade benefit consumers and businesses?

Free trade lowers prices and increases the variety of products available to consumers.

What role does NAFTA play in international trade?

NAFTA reduces trade barriers and promotes economic cooperation among member countries.

In what ways do tax breaks stimulate economic growth?

Tax breaks encourage investments in businesses and donations to charities.

How can tax write-offs be beneficial for individuals and businesses?

Tax write-offs reduce taxable income, lowering overall tax bills.

What effects do subsidies have on market competition?

Subsidies provide financial support, giving certain companies a competitive edge.

How do patents contribute to technological advancements?

Patents protect inventors' rights, encouraging innovation and new product development.

What characteristics define successful entrepreneurship?

Successful entrepreneurship involves innovation, risk-taking, and effective management of resources.