Econ Unit 1

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57 Terms

1

Scarcity

There only exists a finite amount of stuff, limited and costly

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2

Opportunity cost

Profit lost when choosing something over something else

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3

Demand induced

Too much demand

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4

Supply induced

Not enough stuff

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5

Structural induced

Not enough land

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6

Commodity money

Values lies in use and tradable value (wheat, gold, etc)

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7

Mintage

Stamped coins, universal, traded for commodities

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8

Value of a coin

Precious metal and face value from the mint

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9

Seigniorage

Difference between the face value and actual value

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10

Gresham’s law

In a system with good and bad money, bad money will dominate because people want to hoard good money and spend bad money

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11

Paper money

Least intrinsic value

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12

Bimetallism

Fixed exchange rates of gold to other less precious metals, allowed for smaller trades, safer

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13

Debasement

Gold coins getting clipped and becoming debased

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14

Gresham’s law today

Our coins have little value, we have coins with high face value, we often use small bills

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15

Bank of Canada

Responsible for printing our paper money and setting interest rates

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16

Fiat currency

Issued by government central banks, not backed by gold, no intrinsic value

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17

The Eurozone

Most used currency in the world

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18

World currencies

Larger countries have the most currency in circulation

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19

Resource specialization

Specializing to create different resources

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20

Trade networks

A place to trade goods

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21

Trading infrastructure

Ancient romans used ships, fur traders used canoes, royal road started silk road

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22

Standards, laws, and regulations

Ports to collect duties, regulate trade

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23

Mediums of trade

Gold, commodities, agreements

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24

Pax romana

Roman empire build a massive trade network

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25

Infrastructure

Trade routes began developing

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26

The silk road

Silk was in high demand from china, china wanted glassware, spices

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27

Silk road unpopular

Many places banned trade, people stole ideas

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28

Silk road misconceptions

Only silk, trade made nations wealthy, whole road travelled

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29

Mercantilism

Import and export controlled, most gold = most power

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30

Venice mercantilism

Strong military, venice surrounded by water, ducat was strong

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31

Banking and bookkeeping

Taxes and debt

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32

Double entry

Allowed loans to be made

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33

The age of discovery

Renaissance started because of wealth, competition to dominate

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34

Portugal

Africa had lots of gold and trading ports started

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35

Spanish empire

Spain and portugal colonized africa

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36

Early colonization

Columbus convinced crown of benefits, indigenous people oppressed

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37

Chinese trade

China banned foreign trade

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38

Philip II

His reign brought back a lot of gold and silver

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39

Spanish empire economy

They thought that gold was everything and mined so much that it caused inflation

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40

England v.s spain

England sent people to steal spanish treasure

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41

Habsburg wars

Spain was very involved and needed loans

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42

English empire

Colonized north american and only britain could tade with them

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43

Mercantilism

Export as much as possible, import as little as possible, colonies serve the mother country

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44

Triangular trade

Slaves to NA, raw materials to england, textiles to Africa

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45

Dutch dominance

Mastered trade and got very rich

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46

What to do with money

Only improve mother country, build estates

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47

Colbertism

The start of workshops becoming facories

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48

War

Colonies v.s mother country

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49

The seven years war

Frances loses a lot of colonies

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50

Enlightenment

Discussing how to make things better after war, mercantilism was a problem

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51

Physiocracy

Wealth is in agriculture and land development, landowners created wealth, merchants sterile

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52

Individualism

Doing stuff for yourself, tax on land not transactions

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53

Laissez Faire

Against mercantilism and government intervention

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54

Natural laws of the market

Humans always act in self interest, competition, and supply and demand

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55

American revolution

Boston tea party, liberty trees, against mercantilism and economic damage

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56

French taxation

France didn’t have enough money so they started to tax the rich, but mostly taxed the poor

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57

Climate and technology

Cold months led to better technology

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