economics of the nations - economic systems

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9 Terms

1
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What was the main economic goal of mercantilism?

Hoard gold and silver + export more than import

2
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What are the mercantilist five-point program?

Exploration, Trade, Domestic Manufacturing, Colonization, Allies/Treaties/Conquest

3
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According to Adam Smith, what truly makes a nation wealthy?

Prosperity of its people through good and services

4
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What did Adam Smith mean by the “invisible hand?”

The invisible hand guides the economy through supply and demand (self interest), not direct gov. interference

5
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What are the two fundamental questions that determine whether a nation is more capitalistic or socialistic?

Who owns the factors of production, and who answers the three economic questions (what, how, and for whom to produce)

6
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What are the three main duties of government under classic liberal capitalism, according to Adam Smith?

Protect Citizens from each other, from foreign and domestic aggression, provide public goods

7
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A nation in which the government provides cradle-to-grave care, funded by very high taxes, would be classified as practicing:

State Capitalism (welfare state)

8
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Which type of socialism involves government ownership of major industries such as energy, healthcare, and transportation, while still allowing private ownership of small businesses?

Social Democracy

9
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According to Karl Marx, centralized socialism would eventually lead to which "final stage" where government disappears and people share resources equally?

Communism Theory