AP Comparative Government Chapter 4 Vocabulary

Capitalism

a system of production based on private property and free markets

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

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

Deflation

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

Economic Liberalization

when the government has less regulations on the economy

Gini Index

a mathematical formula measures the amount of economic inequality in a society

Gross Domestic Product (GDP)

the total market value of all goods and services produced by a country over a period of one year

Human Development Index (HDI)

a statistical tool that attempts to evaluate the overall wealth, health, and knowledge of a country's people. A statistical tool that attempts to evaluate the overall wealth, health, and knowledge of a country's people.

Hyperinflation

inflation of more than 50 percent a month for more than two months in a row

Inflation

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

Laissez-Faire

the principle that the economy should be "allowed to do" what it wishes

Market

the interaction between the forces of supply and demand that allocates resources

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

Monopoly

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

Non Tariff Regulatory Barriers

policies and regulations used to limit imports through methods other than taxation

Parastatal

industry partially owned by the state

Political-Economic System

the relationship between political and economic institutions is a particular country and policies and outcomes they create

Political Economy

the study of how politics and economies are related and how their relationship shapes the balance between freedom and equality.

Property

ownership of the goods and services exchanged through markets.

Public Goods

goods, provided or secure by the state, available to society, and which no private person or organization can own.

Purchasing Power Parity (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

Quota

a nontariff barrier that limits the quantity of a good that may be imported to a country.

Regulation

rules or orders that set boundaries of a given procedure; may take different forms

Social Expenditures

state provision of public benefits, such as education, health care, and transportation

Tariff

a tax on imported goods.