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Stability
a stable government will result in a stable and successful economy
Ponzi Scheme
dishonest investments looking for easy money (Charles Ponzi)
Socialism
economic system based on collective ownership and control of national resources
Excessive Taxation
Less money available for businesses and households
Inflation and Debasement of Money
leads to increase in prices and higher interest rates for loans
Excessive Regulation
too much regulation discourages current and future business owners from succeeding
Direct Tax
paid directly to the government (example Property/Income)
Indirect Taxes
taxes for which the responsibility for payment can be passed on to someone else
Progressive Tax System
wealthy pay taxes at a higher tax rate than lower income people
Flat Tax
everyone pays the same percentage of taxes regardless of income earned
Regressive Tax
people with a low income pay the highest percentage of taxes while the rich pay a smaller percentage but an equal amount
FICA Tax
funds Social Security and Medicare programs
Original
the government would stay in everything that is public
Current
the government is involved in the public and private sector
Deficit Spending
spending more each year than is brought in through revenue
National Debt
total amount owed
New Deal
created by FDR during the Great Depression
Keynesianism
the government should “prime the economic pump” and put money into the economy
TFP
output per unit of all production units
Sole Proprietorship
simplest form of business organization; has 1 owner
Partnership
2 or more owners
Corporation
legal construct owned by shareholders
LLC
combines a partnership and a corporation
Business Cycle
changes in levels of economic activity over time
GDP
value of all finished goods and services produced within a country during a year’s time
GNP
vale of finished goods and services produced by a nation’s citizens during a year’s time
Peak
the highest point of the expansion
Recession
period of economic decline; GDP is low for 2 months or longer
Trough
the lowest point
Depression
an especially severe recession
Demand-pull Inflation
demand becomes greater than supply resulting in shortages
Cost-push Inflation
production cost increases, so product price increases
CPI
the most used tool to measure inflation
Base Period
time period that has been chosen when the prices of goods are set to 100%, currently 1982-1984 (CPI is compared to the base period)
Stagflation
High levels of inflation combined with high unemployment (results in stagnancy of production)
Supply-side Economics
cutting taxes to make more money available for savings, R&D, hiring new employees, etc.
SSE
implemented by Ronald Reagan
1982-1984
What time period was chosen when the prices of goods are set to 100%
Ronald Reagan
Who implemented SSE
Budget
a spending plan that ensures you can pay for the things you need
Balanced Budget
income equals expenses
Will
how an estate is to be divided among people or organization
Living Will
directs a healthcare professional what to do should a person become incapacitated
Health Care Power of Attorney
makes health care decisions for an individual if the person becomes incapacitated and is not able to make a decision for themselves
Financial Power of Attorney
gives someone else the right to make financial decisions for a person and control hsi finances when he can’t for himself
Nationalism
promoting and supporting a nation regardless of moral or ethical code
Communism
an economic system based on the government control of production, distribution, and consumption of goods
Karl Marx
Founder of Communism
Bourgeois
middle class capitalists
Proletariat
the poor working class
Class struggle
History is a _______ between the middle class and the poor working class
Utopia
a world in which all goods, money, and labor will be shared equally among the people; a perfect society
Bolshevik Revolution
first communist revolution in history (1917); led by Vladimir Lenin
Alexander Solzhenitsyn
famous writer who was ap prisoner of communist Russia
Inefficiency
goods, jobs, and general economic functions do not work properly resulting in shortages
No Market Signals
scarcity and waste results when the government ignores people’s needs/wants
Bad Management
government and business officials are under qualified or not motivated to succeed
Ineffective Reforms
attempted changes to a weak economy, usually creating more problems (Ex. Five-Year Plan of the Soviet Union)
Socialism
an economic system based on government ownership and control of resources
Universal Healthcare
Results in no incentive for doctors, understaffed, underfunded, power quality care
The Communist Manifesto
What book did Karl Marx write
Condition
What did Marx advocate for equality of
Vladimir Lenin
Who led the Bolshevik Revolution
Communist East Germany and Free West Germany
What 2 countries was Germany divided into
Berlin
What is Germany’s capital
Communist East Berlin and Free West Berlin
What was Berlin divided into
Sweden
What country gives more government aid, more government regulation
Note 
Flashcard (86)