Globs exam 2

What is capitalism?

An economic system in which private individuals own the means of production, businesses operate for profit, and markets determine prices.

According to Jahan & Mahmud, what is capitalism?

An economic system where private ownership, competition, and markets organize the production and distribution of goods and services.

What are the four main characteristics of capitalism?

Private property, profit motive, competition, and market exchange.

What is a market economy?

An economy where supply and demand determine prices instead of the government.

What is supply?

The quantity of a good or service producers are willing to sell.

What is demand?

The quantity of a good or service consumers are willing to buy.

What is a free market?

An economy with little government intervention where buyers and sellers make economic decisions.

What are the means of production?

The land, labor, capital, factories, machinery, and resources used to produce goods and services.

What is private property?

The right of individuals or businesses to own and control property.

What is profit?

The money left after all business expenses are paid.

How is profit calculated?

Revenue minus costs equals profit.

What is competition?

The rivalry among businesses to attract customers by improving prices, quality, or services.

Who was Adam Smith?

The Father of Capitalism who wrote The Wealth of Nations and argued that free markets create wealth.

What is the Invisible Hand?

Adam Smith's idea that individuals pursuing their own self-interest unintentionally benefit society.

What is division of labor?

Splitting work into specialized tasks to increase efficiency and productivity.

What was the Industrial Revolution?

A period when manufacturing shifted from hand production to machine production, increasing factory output.

What is wage labor?

Workers selling their labor in exchange for wages.

Who are the bourgeoisie?

The wealthy class that owns businesses and the means of production.

Who are the proletariat?

The working class who sell their labor for wages.

What is socialism?

An economic system where the means of production are owned collectively or publicly to promote equality rather than profit.

According to Jahan & Mahmud, what is socialism?

An economic system where the government or society owns or controls major industries and resources to reduce inequality.

According to Michael Harrington, what is socialism?

A democratic system that promotes social ownership, economic equality, and political freedom.

According to Awad & Bean, what is socialism?

An economic system emphasizing collective ownership and distributing resources based on social need rather than private profit.

What is the main goal of socialism?

To reduce economic inequality and distribute wealth more equally.

What is the biggest difference between capitalism and socialism?

Capitalism emphasizes private ownership and profit, while socialism emphasizes collective ownership and equality.

What is comparative advantage?

The ability of a country to produce a good at a lower opportunity cost than another country.

Why is comparative advantage important?

It encourages countries to specialize and trade, increasing efficiency.

What is mercantilism?

An economic system where governments seek wealth by maximizing exports and minimizing imports.

What was the Bretton Woods Regime?

The international economic system created after World War II that established rules for global finance and trade.

Why was the Bretton Woods Regime created?

To promote global economic stability after World War II.

What is Keynesian economics?

The theory that governments should intervene in the economy during recessions by increasing spending.

Who developed Keynesian economics?

John Maynard Keynes.

What is the IMF?

The International Monetary Fund provides loans and financial assistance to countries experiencing economic crises.

What is the World Bank?

An international organization that provides loans and funding for long-term economic development projects.

What is the difference between the IMF and the World Bank?

The IMF focuses on short-term financial stability while the World Bank focuses on long-term development.

What is the Washington Consensus?

A set of economic policies promoting free markets, privatization, deregulation, and free trade.

What are Structural Adjustment Programs (SAPs)?

Economic reforms required by the IMF and World Bank in exchange for loans.

Why are Structural Adjustment Programs criticized?

They often reduce government spending on healthcare, education, and social programs, increasing hardship for poor populations.

What is development?

The process of improving economic growth and people's quality of life.

What is underdevelopment?

A condition where countries experience low income, poor infrastructure, and limited economic opportunities.

What is the Human Development Index (HDI)?

A measure of development based on life expectancy, education, and income.

What is sustainable development?

Development that meets present needs without preventing future generations from meeting theirs.

What are the Sustainable Development Goals (SDGs)?

The United Nations' 17 global goals for ending poverty, protecting the environment, and improving quality of life by 2030.

What is a Liberal Market Economy (LME)?

An economy where markets and competition coordinate most economic activity with limited government involvement.

What is a Coordinated Market Economy (CME)?

An economy where businesses, labor unions, banks, and the government cooperate in economic decision-making.

What is a Dependent Market Economy (DME)?

An economy that depends heavily on foreign investment and multinational corporations.

What is decommodification?

The extent to which people can maintain a decent standard of living without relying entirely on the market.

What is modernization theory?

The idea that poorer countries develop by following the path taken by wealthier industrialized countries.

What is unequal terms of trade?

A situation where developing countries receive less value for their exports compared to what they pay for imports.

How is capitalism connected to imperialism?

Some scholars argue capitalist countries expanded empires to gain raw materials, labor, and new markets.

Why is the banana industry discussed in globalization?

It demonstrates how multinational corporations can influence developing countries' economies and labor conditions.

Capitalism vs. Socialism

Capitalism emphasizes private ownership and profit; socialism emphasizes collective ownership and greater economic equality.

IMF vs. World Bank

The IMF provides short-term financial assistance for economic crises; the World Bank funds long-term development projects.

LME vs. CME

Liberal Market Economies rely on competition and markets; Coordinated Market Economies rely on cooperation among businesses, labor, and government.

Mercantilism vs. Comparative Advantage

Mercantilism seeks wealth through export surpluses and government control; comparative advantage argues countries should specialize and trade based on efficiency.

Development vs. Underdevelopment

Development improves economic and social well-being; underdevelopment is characterized by persistent poverty, weak infrastructure, and limited opportunities.