Political Systems and Economic Concepts

Vocabulary flashcards covering key political and economic concepts from the lecture notes.

Democracy

A system of government where the people rule, typically through elected representatives; includes direct and representative forms.

Direct democracy

Citizens vote directly on matters affecting the community (as in the Athenian model).

Representative democracy

Citizens elect representatives to make policy decisions on their behalf.

Totalitarianism

A centralized government that maintains power through strict control, censorship, and suppression of opposition.

Capitalism

An economic system based on private ownership of production and market-driven allocation of resources.

Socialism

An economic system with significant government or collective involvement in production and welfare; may include worker councils.

Communism

A classless society with state or collective ownership of major production and centralized planning.

Two-party system

A political system dominated by two major parties (e.g., Democrats and Republicans) though other parties exist.

Libertarian

A political ideology prioritizing individual liberty and minimal government intervention.

Independent

A voter or candidate not formally affiliated with a major political party.

Compromise

Mutual concessions between parties to reach governance or policy agreements.

Oligarchy

Rule by a small group of people who hold power.

Planned economy

An economy in which the government plans production and distribution of goods.

Free market economy

An economy where prices and production are determined by supply and demand with limited government interference.

State-run economy

An economy in which the government owns or controls key industries.

Tax haven

A jurisdiction with favorable tax rules used to shelter wealth (example Isle of Man).

Foreign Corrupt Practices Act (FCPA)

U.S. law prohibiting bribery of foreign officials by U.S. companies.

Transparency International

Global NGO that publishes the corruption perceptions index and measures corruption worldwide.

Corruption (public and private)

Public corruption involves bribery or abuse of power by public officials; private corruption involves bribery in the private sector.

Caveat venditor

Let the seller beware in contract law.

Caveat emptor

Let the buyer beware in contract law.

Antitrust laws

Laws designed to promote competition and prevent monopolies or anti-competitive practices.

Defined benefit pension

A retirement plan where the employer promises a specific benefit at retirement.

Defined contribution (401(k))

A retirement plan where contributions are made to an individual account; retirement depends on investment performance.

Inflation

General rise in prices and fall in the purchasing power of money.

Stagflation

A period of stagnant economic growth accompanied by high inflation.

Currency devaluation

A decrease in the value of a country’s currency relative to other currencies.

Macro risk

Risks at the country or national level that can affect business and markets.

Immigration policy

Government rules governing entry and stay of foreign nationals and the impact on labor supply.

Economic freedom

The degree to which markets operate with limited government interference; linked to growth and rule of law.