Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
SALTBJUEcon2
Study Helps for Econ Test 2
| Question | Answer |
|---|---|
| Economic model | a simplification of how factors in the environment affect choices |
| tabular model | table or chart explaining the relationships between pairs of variables; also called a schedule |
| schedule | table or chart explaining the relationships between pairs of variables; also called a tabular model |
| line graph | graph formed by the plotting of data involving two variables and the connecting of the resulting points to form a line of infinite information from the data |
| circular flow model | model depicting the flow of economic goods and services between households, business firms, government, and financial markets |
| consumption expenditures | the total expenditures made by all households |
| factors of production | the resources used in producing the nation's GNP; labor, land, financial capital, and entrepreneurship |
| land | factor of production denoting all the natural resources that go into the production of goods |
| labor | factor of production denoting all human effort that goes into the creation of goods and services |
| financial capital | factor of production denoting all money loaned directly to business firms from the household sector |
| real capital | tools business firms use to produce goods and services |
| entrepreneurship | factor of production denoting the activity of creatively combining national resources, human labor, and financial capital in unique ways to develop new and useful products and services |
| rent | factor costs involving all payments for the use of an owner's property |
| wages | factor costs involving all payments for labor used to produce goods or services |
| interest | additional charge that a creditor demands from a borrower to cover the expense of the loan and to provide a profit; also the factor costs involving the payments made on borrowed money |
| profits | factor costs involving the rewards entrepreneurs receive for successful risk taking |
| transfer payments | payments of money or goods from the government to individuals for which no specific economic repayment is expected |
| budget deficit | situation in which a government, business firm, or individual receives less income than is paid out in expenses |
| budget surplus | situation in which a government, business firm, or individual receives more income than is paid out in expenses |
| financial market | vast collection of financial institutions that receive deposits of excess funds from households and that lend to business firms |
| dissaving | action of withdrawing money from an account or borrowing money |
| crowding out | situation in which the government borrowing reduces the financial capital available to business firms |
| What advantage does the line graph have over the tabular model? | provides more data |
| What is the most important factor of production? | entrepreneurship |
| What economic functions does the government perform as illustrated by the circular flow model? | Government purchases goods and services; transfer payments of money or goods are made to households; taxes are levied for these payments and purchases |
| Why is the financial market necessary for the effective functioning of a developed society? | savings are taken from households and channeled into business or government for financing |
| extensive growth | ability to produce more goods and services because business firms are using more land, labor, or financial capital |
| intensive growth | ability of business firms to produce more goods or services by using existing factors of production with greater efficiency |
| consumer goods | goods that are purchased for personal use |
| capital goods | goods that are used to produce consumer goods; also called real capital |
| consumer goods/capital goods tradeoff | allocation of limited resources to produce either consumer goods or capital goods |
| labor intensive | description of a business firm that uses a great deal of human labor relative to real capital |
| capital intensive | description of a business firm that uses more automated equipment than human labor |
| egalitarian fairness | viewpoint maintaining that each person in the nation has a right to a part of the nation's wealth simply because he is a part of the human race |
| economic leveling | equal distribution of the nation's income regardless of each person's ability to contribute to its pool of wealth |
| libertarian fairness | viewpoint maintaining that the only economic right to which citizens are entitled is the right to own and use property free of government interference and that the accumulation of wealth is the sole responsibility of each individual |
| economic Darwinism | another name for the libertarian view of economic fairness allowing for a "survival of the fittest" in the accumulation of wealth |
| What are the four economic goals of most societies? | 1) Low level of unemployment; 2) stable price level; 3) healthy rate of economic growth; 4) fair distribution of income |
| How does the market solve the consumer goods-capital goods production dilemma? | free market senses need for more or less capital and adjusts without force to consumer spending |
| How does the command system attempt to solve the consumer goods-capital goods production dilemma? | central committee decides proportion of consumer goods to capital goods to produce |
| mercantilism | economic philosophy commonly held in Europe from the 16th to 18th centuries that advocated the accumulation of gold and silver as national wealth |
| favorable balance of trade | condition experienced when a nation sells more goods abroad than it purchases from foreign nations |
| laissez faire | idea that government should generally leave the economy of a nation alone and allow the people to seek their own profit |
| capitalism | economic system in which private individuals own most of the factors of production and make most economic decisions |
| socialism | economic system in which a central authority, committee, or the people in common generally own the factors of production and make economic decisions |
| radical capitalism | most extreme form of capitalism in which private citizens own all factors of production and make all economic decisions |
| classic liberal capitalism | form of capitalism allowing government only minimal ownership of resources and decision-making power |
| public goods | needed goods and services which private firms cannot create at a profit |
| state capitalism | form of capitalism in which the vast majority of the factors of production are owned by private citizens, but the government intervenes widely in economic intervenes widely in economic decisions to ensure that egalitarian goals are carried out |
| welfare state | nation under extreme state capitalism in which high taxes are used to provide wide social programs |
| European social democracy | form of socialism in which the state takes possession of the economy's major industries but allows some private enterprise and decision making |
| nationalization | government acquisition of the ownership of major industries |
| privatization | government's selling of nationalized businesses back to private owners |
| worker management socialism | form of socialism in which the government owns all business firms but allows the workers to make many major economic decisions collectively |
| centralized socialism | form of socialism in which the government is both the central owner and the decision maker in all economic affairs of the state |
| manifesto | public declaration of one's political or social beliefs and intentions |
| communism | most extreme form of socialism in which all individuals voluntarily contribute their labor for the good of society while taking from the economy only the goods and services that they truly need |
| What two characteristics did Adam Smith point out as being the keys to economic prosperity in a nation? | 1) people free to specialize in jobs for which they are suited; 2) people should be able to exchange products with others |
| What is liberalism according to its classical meaning? | freedom of individual and limiting of government |
| Why is radical capitalism unscriptural? | Scripture stresses government is a divine institution created by God and placed over us for our good |
| Socialism occurs when the government nationalizes which key industries? | transportation, communication, energy, finance and health care |
Created by:
1348555001
Popular Economics sets