Econ. Unit 2

The C's of Capitalism

1. Control your choices
2. Creates competition
3. Consumers can change
4. Circulation of money is efficient

4 Characteristics of Socialism

1. Structure
2. Solutions
3. Stability
4. Sharing

things that have become more accessible because of globalization

education, innovation, and improvements

economic important of G8 and G20 summits

negotiate trading agreements, learn from other countries, etc.

Globalization

interconnection of international markets, countries are connected

Keynesian economic theory

The theory emphasizes that government spending and deficits can help the economy weather its normal ups and downs. Proponents of this theory advocate using the power of government to stimulate the economy when it is lagging.

difference between Push and Pull business models

surplus (push)
shortage and equilibrium (pull)

the stages of the economic cycle

expansion, peak, contraction, trough, recovery

costs of globilization

- exploitation of workers
- unequal power and representation
- domestic unemployment
- foreign dependence and entanglement
- domino theory economics
- communicable diseases and spreading

health insurance deductible

the amount of covered expense that the insured pays before the insurer pays, not routine check-ups, paid once and then covered for the whole year

why retirement accounts are dual source accounts

because money gets put into the stock market until you retire

difference between supply and demand theories

supply is business side
demand is consumer side

why is equilibrium the goal of every buisness

because they still make enough for people to buy, but still price it high enough to make a profit

people groups within hidden unemployment

people not wanting to work, stay-at-home parents

the 3 big questions every business owner must answer in capitalism

1. What will be produced? (resources)
2. How will we produce it? (production)
3. Who is going to consume it? (profit)

difference between medicare and medicaid

Medicare is a federal program that provides health coverage if you are 65 or older or have a severe disability

Medicaid is a state and federal program that provides health coverage if you have a very low income

where the government finds funding for social security

dedicated payroll tax

frictional unemployment

people in-between jobs (most common)

cyclical unemployment

10 year cycle of recession

structural unemployment

market failure of an industry

potential actions a union can take on to persuade a buisness

- give some of your money from paychecks
- representation of lawyers
- progression of benefits
- arbitration: compromise
- protests

summative characteristics of life insurance

- paid upon death
- basic is like 6 figures
- can get term life insurance out for dire circumstances
- whole life: investment money to access

why amazon has become a frontrunner in business and profitability

- customer service
- innovation of better products
- diversification of products sold
- employees experience and social/community provision or interaction

why the American economy is called a "mixed economy"

because of capitalism and socialism

differences between capitalism and socialism

Capitalism is a free form way of individual success, whereas socialism looks for group change at the expense of some others

what aspects of the economy help the nation move from stage to stage in the econ cycle

- money supply
- consumerism
- bubbles and overconfidence/under-confidence
- government spending: John Maynard Keynes
- investments
- trust in banks
- market failures

SNAP

Supplemental Nutrition Assistance Program