chapter 2 econ

Traditional Economy

Economy based on ritual, habit, or custom

Command Economy

An economy with one head or central authority that makes all the choices in the decisions for allocating resources and money

Market Economy

Economic system in which the what, whom, and how to produce questions are all answered by the people

Nationalized Healthcare

Care that is offered by the state rather then privatized companies. Often is paid into through taxes

Mixed Economy

An economic system that combines private and state enterprises

Population Density

Number of people per square mile of land area

Capital Intensive

Putting more capital into something then labor

Keiretsu

Independently owned group of Japanese firms joined and governed by an external board of directors

European Union

Former group of Coal and Steel workers that formed a union in 1993. Called the Maastricht Treaty

Nationalization

Shift from an economy that is dominated mainly by the private sector to a economy dominated by the government

Socialism

An economy that is powered by the government that looks out for the social well being of everyone and makes sure everything is equal. Rather then letting the people do what they want with capital and businesses.

Capitalism

An economic system in which private citizens have the potential to own the factors of production

Great Leap Forward

China's 2nd 5 year plan that did not pan out. This tried to force collectivization of agriculture and industrialization

Five-Year Plan

Comprehensive and centralized economic plan used to coordinate and develop Ag. and Industry

Gosplan

The centralized planning committee that controlled the S.U's 5-year plans

Collectivization

Forced ownership of the factors of production (Used in Soviet Union)

Perestroika

Fundamental restructuring of the Soviet Union economy; policy was introduced by Gorbachev

Privatization

Conversion of state owned factories to privately owned ones

Vouchers

Papers given to businesses so that they can purchase Gov. property during times of privatization

GDP (Gross Domestic Profit)

Monetary value of all final goods sold within the boarders of a country. This can be goods, services, and structures produced within a 1 year period.

GDP Per Capita

GDP on a per person basis; this can be expressed in current or constant dollars

Economic Transition

A transition a country goes through when they want to switch economic models. They often underestimate the cost.

Allocation

Distribution of goods

Great depression

The largest moment of economic downfall in the U.S (1929-1939)

Market

Meeting place for people or businesses to by and sell goods/ services

Marxism

Strain of communism in which everything is set equally by the state (Created by Karl Marx)

GDP in some respects is irrelevant because...

It does not focus on environmental sustainability, the well being of the people, and income inequality

Robert Kennedy said what about gdp?

"Gdp is takes into account everything except what makes life worthwhile"

Hugo Chavez

Politician and president of Venezuela. Socialist. Believed in handouts and equality.

Joseph Stalin

Leader of Soviet Union. Marxist. Started the 5 year plan.

Mikhail Gorbachev

Started with Marxism but switched to a combo of Socialistic Democracy

Boris Yeltsin

Communist/Liberalism. Creator of the soviet stock market

Mao Zedong

Chinese communist revolutionary