economics: section 2.1

laws of economics

general rules that guide the production, distribution, and consumption of goods

mercantilism

an economic system that advocates the building up of the state’s treasury with the goal of accumulating as much wealth (gold) as possible

trade balance

the difference between the amount of goods a nation sells and the amount that it buys

1. sells

2. buys

fill in the blank

a trade balance is the difference between the amount of goods a nation _____ and the amount that it ____

tariffs

taxes governments used to discourage imported goods

imperialism

the establishment of colonies and territories for the benefit of their mother countries (ex: English empire in the 17-1800s)

physiocrats

fill in the blank

economists in the 1700s who first tried to create a science of PDC of goods

samuel du pont

published Physiocracy (“the rule of nature”)

physiocracy

fill in the blank

samuel du pont published _________ (“the rule of nature”)

• land

• natural resources

fill in the blank

physiocrats believed that a nation’s true wealth comes from _____ and ________ __________

laissez-faire

“let things alone”; the government should leave the economy to operate itself with little intervention

classical economics

a belief system that originated with physiocrats; the free-market system is the best possible system

adam smith

the founder of modern economics