Economic and Political Systems Lecture Review

These flashcards cover key concepts related to economic and political systems, their definitions, and implications based on the lecture notes.

Economic System

The way a country organizes its resources and distributes goods and services to its citizens.

Political System

The type of government by which a country is run, closely linked to its economic system.

Circular Flow Model

A model that represents how money and goods flow through an economy, involving households and businesses.

Market Economy

An economic system driven by free competition, where supply and demand determine production and pricing.

Centrally Planned Economy

An economic system where the government controls all aspects of the economy, including prices and production.

Mixed Economy

An economic system that combines private ownership with government involvement in the economy.

Democracy

A form of government where all eligible members participate in decision-making through elected representatives.

Autocracy

A system of government in which a single individual or small group has absolute power.

Corruption

The use of powers by government officials for illegitimate private gain, including bribery and nepotism.

Economic Development

The process of improving the economic well-being and quality of life for a community by creating and retaining jobs.

Developed Economies

Countries characterized by high per capita incomes and strong GDP, with advanced infrastructure.

Undeveloped Economies

Countries with severe poverty and underdeveloped infrastructure, lacking basic social services.

Opportunity Cost

The value of what is foregone in order to pursue a particular decision or action.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

PEST Analysis

A strategic tool used to analyze the Political, Economic, Socio-Cultural, and Technological factors affecting an environment.

Trade Wars

Situations where governments actively engage in conflict over trade policies, aiming to protect their national interests.