Economics and Government Test Study Guide

These flashcards cover key concepts and definitions related to economics and government, designed for the upcoming test.

What is the definition of economic systems?

Frameworks that dictate how resources are allocated and managed within a society.

What major questions do economic systems address?

What, How, For Whom?

What is a command economy?

A system where the government owns, controls, and operates the factors of production and determines what is produced and the price for goods.

Give an example of a command economy.

North Korea.

What characterizes a traditional economy?

It is based on society customs and traditions, often involving agriculture and barter.

Provide an example of a traditional economy.

Indigenous communities such as the Aborigines in Australia.

What is a market economy?

An economy where decisions on production and consumption are guided by privately owned businesses based on supply and demand.

Do any countries have a true market economy?

No, no country has a true market economy.

What is a mixed economy?

An economy that combines elements of both command and market economies.

Provide an example of a mixed economy.

The U.S. and British economies.

What are trade barriers?

Policies imposed by the government to regulate international trade.

Why do countries establish trade barriers?

To regulate trade and protect domestic production.

What is a tariff?

A tax imposed on imported goods that makes them more expensive.

What is a quota in terms of trade?

Limits on the quantity of specific goods that can be imported into a country.

What does an embargo do?

A country refuses to trade with another country, usually due to political reasons.

What are capital resources?

Resources needed to make a good or service, like tools and machinery.

Give an example of capital resources.

Machinery in a factory that manufactures cars.

What are human resources?

The workforce involved in the production process, including skilled and unskilled labor.

Provide examples of human resources.

Engineers and factory workers.

What are natural resources?

Raw materials extracted from the environment used in production.

Give examples of natural resources.

Water, minerals, forests.

Define entrepreneurship.

People who take risks and provide capital to make goods or services.

Give an example of entrepreneurship.

A person who starts a new restaurant.

What is Gross Domestic Product (GDP)?

The total market value of all final goods and services produced within a country in one year.

What are goods?

Items we buy, such as books and video games.

What are services?

Things people do for us, like waiting tables or cleaning hotel rooms.

What are opportunity costs?

The choice between two items where the opportunity cost is the option not selected.

Define literacy rate.

The percentage of people aged 15 and older who can read and write.

What is per capita GDP?

The average value of goods and services available to people in a country in one year.

What does standard of living refer to?

The quantity and quality of goods and services that people have.

What is the unemployment rate?

The percentage of the labor force that is unemployed but actively seeking employment.

How is power distributed in a unitary government?

All power is held by a single authority.

Give an example of a unitary government.

France.

What is a confederation government ?

An association of independent organizations that have no authority over each other.

Provide examples of confederation types of governments.

EU and OPEC.

Describe a federal government system.

Power is shared between central and regional governments.

Give an example of a federal government.

USA or Mexico.

What is an autocracy?

A system where one person has complete power and citizens have no participation in government.

Define oligarchy.

A system where a few citizens participate based on wealth and power.

What is democracy?

A system where all citizens have the right to vote for leaders.

What is the role of the legislature?

Members of a group that make the laws.

What is a parliamentary democracy?

A system where people vote for the legislature, which then elects a Prime Minister.

What happens if a Prime Minister loses the support of the legislature?

New elections will be held.

What is a presidential democracy?

A system where people vote for their President and legislature separately.

Give an example of a country with a parliamentary democracy.

Israel.

Give an example of a country with a presidential democracy.

Turkey.

What type of government does Saudi Arabia have?

Autocracy (king).

How do governments determine citizen participation?

through autocracy, oligarchy, or democracy system