Chapter 04

Individualism

A belief that individual rights and responsibilities should be placed above the group's welfare.

Collectivism

A concept that stresses the relative importance of a group's welfare over that of the individual.

Political System

Structures, processes, and activities by which a nation governs itself.

Democracy

A political system in which government leaders are elected directly by the wide participation of the people or by their representatives.

Economic System

Structure and processes that a country uses to allocate its resources and conduct its commercial activities.

Centrally Planned Economy

An economic system where the government makes all decisions regarding the production and distribution of goods.

State Capitalism

An economic system in which the state plays the role of leading economic actor and uses markets primarily for political gain.

Mixed Economy

An economic system where land, factories, and other resources are split between private and government ownership.

Market Economy

An economic system where most land, factories, and other resources are privately owned.

Legal System

A country’s set of laws and regulations, how its laws are enacted and enforced, and how its courts hold parties accountable.

Common Law

A legal system based on tradition, precedent, and usage; found in countries like the USA and Britain.

Civil Law

A legal system based on a detailed set of written rules and statutes that constitute a legal code.

USed in Cuba, Puerto Rico, Quebec,

Theocratic Law

A legal system based on religious teachings.

Intellectual Property

Property that results from people’s intellectual talent and is essential for innovation and creativity.

Patent

A property right granted to the inventor of a product or process to exclude others from making, using, or selling it.

Trademark

A property right in the form of words or symbols that distinguish a product and its manufacturer.

Copyright

A property right giving creators of original works the freedom to publish or dispose of their work as they choose.

Product Liability

Responsibility of manufacturers and sellers for damage caused by defective products.

Antitrust Regulations

Laws that promote fair competition and prevent monopolies.

Taxation

The process by which governments impose financial charges on individuals or businesses, often as consumption taxes.

Anarchism

a political theory advocating the abolition of hierarchical government and the organization of society on a voluntary, cooperative basis without recourse to force or compulsion.

Totalitarianism

Relating to a system of government that is centralized and dictatorial and requires complete subservience to the state

Pluralism

a condition or system in which two or more states, groups, principles, sources of authority, etc., coexist

Centrally Planned Economy

An economic system where decisions about production, investment, prices, and incomes are determined by the government or a central authority

Why did centrally planned economies decline

1. Failure in creating economic value

2. Failure to provide incentives

3. Failure to achieve rapid growth

4. Failure to satisfy consumer needs

Supply

Quantity of good or service that producers are willing to provide at a specific selling price

Demand

Quantity of Goods or services that buyers are willing to purchase at a specific selling price

3 Elements of common Law

Tradition: Country legal history

Precedent: Past cases that have come before the courts

Usage: How laws applied in specific situations

Value Added Tax

A tax levied on each party that adds value to a product throughout its production and distribution