Economics Lecture Notes Flashcards

Flashcards covering vocabulary and key concepts from Economics lecture notes.

Economics

A universal issue where unlimited wants exceed limited resources, leading to scarcity.

Scarcity

The condition where there isn't enough of something to satisfy everyone's wants.

Command Economy/Communism

An economic system where the government answers the questions of what, how, and for whom to produce.

Free Market Economy/Laissez-faire Capitalism

An economic system where individuals answer the questions of what, how, and for whom to produce.

Mixed Economy/Socialism

An economic system combining individual and government decision-making.

Standard of Living

Degree to which basic needs are met, often measured by income.

Quality of Life

Non-material well-being including happiness, health, and freedom.

Mercantilism

A historical economic system (16th-18th century) with complete government control and focus on high exports and low imports.

Classical Liberalism Economics/Capitalism

An economic thought that advocates for prices set by supply and demand, along with limited government intervention.

Invisible Hand

The idea that the economy would be self-regulating through self-interested individuals and businesses.

Competition

Different entities selling similar products, leading to innovation and better prices.

Oligopoly

Market collectively owned by a select few, giving an illusion of competition. Examples: Telus, Bell, Rogers

Urbanization

The shift from farm to city; gave Indus Rev a source of labour and workers.

Three-Field System

Wheat/rye, oats/beans, and fallow (unplanted soil).

Subsistence farms

Land was formerly subdivided for small farms to rent. Farms grew only enough for farm’s survival, not a surplus. Inefficient.

Domestic System/Cottage Industry

Small-scale production from a person’s home.

Economies of Scale

Savings in cost gained by increased level of production.

Luddites

Workers that lost jobs during the Industrial Revolution and broke into factories

Naturalist - Thomas Malthus/Malthusian Check

Pop would always outpace food prod. Growing gap would lead to disaster.

David Ricardo - Iron Law of Wages

NO minimum wage. Set NATURALLY by supply & demand.

Samuel Smiles - ‘Self-Help’

NO support at all. If poor, not a flaw in clas lib, but character flaw. Lazy, drunk, a bum.

JS Mill

govt should protect workers in some way. Min wage, max hrs, safe working conditions, NO child labour.

John Maynard Keynes - Business Cycle

Economies experience booms and busts naturally.

Bull Market - Prosperity

A strong market; hi employment & business profits.

Recession

Drooping from prosperity - declining profits, lowering employment.

Depression

Lowest points - collapsed economy, zero profits, hi UNEMPLOYMENT.

Recovery

Increasing employment & profits.

Keynesian Economics/Demand-Side Economics

govt should interfere in economy to protect citizens from xtrm his and los in business cycle.

Public Work Projects

Large construction jobs paid by govt. Roads, bridges, schools, hospitals. Kickstarts economy; demand rises in other aspects.

Social Programs

unemployment insurance, welfare, workers compensation, pension. Ppl should have some income even if not working.

Tax Cuts/Breaks

more money accessible == more demand can be harnessed.

Deficit Financing

govt would take loans from other countries, banks, to make up for a deficit in money.

Roaring 1920s

strong US Economy after WWI.

Insider Trading

inside, private info. Not illegal in 1920s - NO REG.

Great Depression

1929-1939; Stock market crash of October 1929.

Protectionism

protecting domestic jobs, tariffs on foreign goods. Buy local.

Smoot-Hawley Tariff Act

Raised imports on ALL imported goods and protect local goods.

Hoovervilles

Tent cities in park to embarrass Hoover, do nothing.

New Deal

1932 - FDR was elected after campaigning to implement demand-side economics.

Civilian Conservation Corps CCC

unemployed men hired in natl parks to cut trees down, build roads.

Works Progress Admin. WPA

Beautification of cities, build city roads, encourage tourism.

Public Works Admin. PWA

Massive construction jobs like bridges.

Tennessee Valley Authority TVA

Electricity dams.

US SEC

enforce regs on stock market, no insider trading, authentic profit records, etc.

FDIC

protect ppls money in banks. Banks shut down, ppls money is protected by govt. insurance.

Social Security Act

social safety net for ppl who lost jobs, help them through economic difficulty. Welfare, employment insurance, pension.

Wagner Act

labour laws, ppl had the legal right to unionize and strike.

Fair Labour Standards Act

MINIMUM WAGE, MAX HOURS, OT PAY. Outlawed child labour, price controls for products unless govt approved. Cant use law of supply and demand, goes against AS.

Welfare State

govt artificially gets involved in economy.

Stagflation

high inflation during stagnant stock market growth.

Supply-Side Economics/Friedrich Hayek/Neoconservatism

tax breaks for the wealthy; excess wealth would in theory be reinvested in businesses, aka hire workers.

Trickle Down Economics

benefits for the rich TRICKLE down to others.

Privatisation

business not owned by govt.

Deregulation

Less restrictions on business no matter if its on worker or environmental safety.

Monetarism

create a central bank that wards off inflation and controls the supply of money.

Subprime Mortgages

Prime - best offer a bank can give. Subprime - artificially lowering interest rate to get ppl to buy houses they couldn’t normally get.

Blue Chip Stocks

highest rated and valued stocks.

From each according to abilities, to each according to his needs.

communist

Robert Owen - Socialism

Factory owner during indus rev. Saw the negatives of it

Mixed Economic System/Socialism

combining govt. involvement and economic freedom.

Nationalization

Nationalization of Key Industries

Socialist Welfare State

Sweden also contain capitalist aspects - private property, profit motive, private business.

Planned/Controlled Economy - Communism

govt. has COMPLETE control over economy.

Classical Marxism

history can be explained as a struggle between rich and poor.

Bourgeoisie

rich

Proletariat

workers/poor

Tsarist Russia - Social Class

peasants/serfs - illiterate, uneducated. Subsistence farmers.

Bloody Sunday

Factory workers and families peacefully marched to Russian Palace. Peaceful protest seeking better pay and conditions. (January 1905)

Lenin

“Peace, land, and bread”

Union of Soviet Socialist Republics (USSR)

1922 - Reds had full control of Russia; enforced War Communism, policy of Lenin - factories and farms actively supported Red Army.

New Economic Policy (NEP)

recognized the brutality of War Communism. Allowed some aspects of communism; private property, profit motive.

Joseph Stalin

Collectivization - grow surplus of grain to sell to the west, and use the funds to buy modern machines.

Kulaks

best farmers in Russia, profited from Tsar’s rule due to owning their farms.

Forced Collectivization Failure

Stalin took farmers away but expected production. Protests were in the form of burning stock, leading to initial failure of forced collectivization.

Five Year Plan

came up with set goals for industries to meet. Would be done every five years.

Perestroika

Under Gorbachev - allowed some elements of capitalism to exist - private property, private business, profit motive.

Glasnost

political freedoms, citizens could critcize govt/communist party.