Economics and Politics

These flashcards cover key terms and concepts related to economics and politics in the context of international business.

Economic System

The way a country organizes its resources and distributes goods and services to its citizens.

Market Economy

An economic system determined by free competition, where market forces and self-interest determine what goods are created and sold.

Centrally Planned Economy

An economic system in which the government controls all elements of the economy, including prices, wages, and production.

Mixed Economy

An economic system that combines government intervention and private enterprise, common in many countries.

Democracy

A state governed by all eligible members of the population through elected representatives.

Autocracy

A state governed by a single individual or a small group of people with unlimited power.

Underdeveloped Countries

Nations that are at the lowest level of the world’s economies, characterized by severe poverty and lack of social services.

Developing Countries

Nations in transition from a poor economy to a prosperous one, also known as emerging or second-world countries.

Developed Countries

Nations characterized by a high per capita income, significant reliance on secondary and tertiary industries.

Business Cycle

Recurring periods of increased and decreased economic activity, characterized by the stages: recession, trough, expansion, and peak.

Absolute Advantage

The ability of one country to use its resources to make a product or service more efficiently than other countries.

Comparative Advantage

The ability of a country to provide a product or service at a lower opportunity cost than another country.

Lobbying

The process through which companies or special interest groups attempt to influence government officials and public policy.

Economic Indicators

Statistics that provide information about the economic performance of a country, classified as leading, lagging, or coincident.