Chapter 4: Political Economy

Gross domestic product

________ (GDP): total value of goods and services produced in a country in a year.

Gini index

________- a statistical formula that measures the amount of inequality in a society; its scale ranges from 0 to 100, where 0 corresponds to perfect equality and 100 to perfect inequality.

Central bank

________- the state institution that controls how much money is flowing through the economy, as well as how much it costs to borrow money in that economy.

Deflation

________- a period of falling prices and values for goods, services, investments, and wages.

Mercantilism

________: a political- economic system in which national economic power is paramount and the domestic economy is viewed as an instrument that exists primarily to serve the needs of the state.

Comparative advantage

________- the ability of one country to produce a particular good or service more efficiently relative to other countries efficiency in producing the same good or service.

Regulation

________- a rule or an order that sets the boundaries of a given procedure.

Quota

________- a nontariff barrier that limits the quantity of a good that may be imported into a country.

Oil

________ and gas can provide wealth or lead to a "resource curse.

Development Index

Human ________ (HDI)- a statistical tool that attempts to evaluate the overall wealth, health, and knowledge of a countrys people.

Laissez faire

________- the principle that the economy should be "allowed to do "what it wishes; a liberal system of minimal state interference in the economy.

Hyperinflation

________- inflation of more than 50 % a month for more than two months in a row.

Tariff

________- a tax on imported goods.

Property

________- goods or services that are owned by an individual or a group, privately or publicly.

Monopoly

________- a single producer that is able to dominate the market for a good or service without effective competition.

Inflation

________: increase in the general price level of goods and services in the economy when demand outstrips supply.

Parastatal

________- industry partially owned by the state.

Liberalism

________ has dominated global economics over the last few decades, but significant criticisms have emerged in recent years.

Social expenditures

________: the states provision of public benefits, such as education, healthcare, and transportation.

Nontariff

________ regulatory barriers: health, packaging, or other restrictions that make it more difficult for foreign goods to sell in local markets.

single producer

Allowing or banning monopolies: a market controlled by a(n) ________.

Capitalism

________- a system of production based on private property and free markets.

Power Parity

Purchase ________ (PPP)- a statistical tool that attempts to estimate the buying power of income across different countries by using prices in the United States as a benchmark.

Strategic industries

________ are fully nationalized or parastatals.

Political economy

________: the study of the interaction between states and markets.

medium of exchange

Money is a(n) ________.

regulatory barriers

Nontariff ________- policies and regulations used to limit imports through methods other than taxation.

Tax revenue

________ comes from a variety of sources.

Lower rates

________: More loans + more spending= more money flowing.

Political economic system

________: the relationship between political and economic institutions in a particular country, as well as the policies and outcomes they create.