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Ch. 17-18
Trading
64
Economics
12th Grade
05/16/2013

Additional Economics Flashcards

 


 

Cards

Term
4 Economic Systems
Definition
Tradition, Market, Command, Mixed
Term
Karl Marx & Communist Manifesto
Definition
Wrote it; Outlined the theories of Communism
(Economic Factors)
Term
Lenin & Stalin
Definition
* Lenin Made Russia first communist nation, established war communism
* Stalin succeeded Lenin and severly punished workers for not following Five Year Plan
Term
Gorbachev & Perestroika
Definition
Gorbachev: Introduced reform policies (perestroika) to move towards a market economy
Term
Mao, Great Leap, Cultural Revolution
Definition
Brought Communism to China in 1949 / focused on steel and heavy industries / violent movement established after failure of Great Leap Forward
Term
Xiaoping & Four Modernizations
Definition
(1976)
1. Agriculture
2. Industry
3. Science & Technology
4. Defense
Term
Xiaoping & Special Economic Zones
Definition
Created regions that have economic laws that are different from a country's usual economic laws to increase foreign investment.
Term
Tiananmen Square Massacre
Definition
Attack on protestors in the Square in 1989, Killing hundreds
Term
Developed Nations
Definition
15% of world (U.S., Canada, western Europe, Japan, South Korea, Australia, New Zealand)
Term
Characteristics of developed nations
Definition
*High Level of Industry
*High Level of Technical Expertise
*Variety of Economic Institutions
*High Energy Use
*High Per Capita GDP
Term
LDC's & Characteristics
Definition
85% of World /
*Limited Resources/Arable Land (productive Land)
*Rapid Pop. Growth rate
*Predominantly an Agricultural - Subsistance (just enough to survive)
*Low Human Capital, "Brain Drain" (Knowledge Leaves Country)
*Low Per Person GDP
Term
Transitional Economies
Definition
Nations that have moved or are moving from a command to market or mixed. (China, Russia...etc.)
Term
Per-Capita GDP
Definition
Average Annual Income of individuals in a given country
Term
Literacy Rate
Definition
The percentage of a nations population that can read and write in their native language
Term
Infant Mortality Rate
Definition
The number of deaths from birth of infants per year for every certain amount of people.
Term
Reasons for giving foreign aid
Definition
Humanitarianism, Economics, Political, Military
Term
International Aid Organizations (3)
Definition
World Band: Largest, Loans and Contributions
UNDP:Grants, eliminate poverty
IMF: Debt rescheduling & stabalization program
Term
Specialization
Definition
Countries produce certain goods (determined by resources)
Term
David Ricardo
Definition
Developed the theories of absolute & Comparative advantage
Term
Absolute Advantage
Definition
When a nation can produce more than a trading partner
Term
Law of Comparative Advantage
Definition
The ability to produce at a lower opportunity cost
Term
Exports & Imports
Definition
Exports: sold to other countries/ Imports: Bought from other countries
Term
Trade Barrier
Definition
Laws passed to limit free trade among nations
Term
Quotas, Tariffs, Embargo
Definition
Quotas: limit to the number of goods brought in
Tariff: Tax on an import
Embargo: Complete ban on trade, usually political reasons
Term
Trade War
Definition
Succession of increasing trade barriers between nations
Term
Protectionism
Definition
the use of trade barriers between nations to protect domestic industries
Term
Infant Industries
Definition
new industries that are often unable to compete against larger, more established competitors
Term
Balance of Trade
Definition
Equal export & import
Term
Trade Deficit
Definition
they import more than they export
Term
Trade Surplus
Definition
They import more than they import
Term
European Union
Definition
EU : Most advanced trade agreement, has own bank, flag, and currency
Term
NAFTA
Definition
North American Free Trade Association: U.S., Canada, Mexico, largest free trade zone in the world
Term
World Trade Organization
Definition
a group that adhere to the policies of the General Agreement on Tariffs and Trade
Term
Multinationals
Definition
Large corporations that manufacture & Sell throughout the world
Term
Positive statements/Economics
Definition
A way of describing and explaining economics as it is
Term
Normative Statements/Economics
Definition
A way of describing and explaining what economics behavior ought to be, not what it actually is.
Term
Scarcity
Definition
a situation that exists when there are not enough resources to meet human wants.
Term
Opportunity Cost
Definition
the value of something that is given up by choosing one alternative over another
Term
Production Possibilities Curve
Definition
a graph used to illustrate the impact of scarcity on an economy
Term
Law of Demand
Definition
- When price rises, quantity demanded falls
• Ceteris Paribus
- When price Falls, Quantity demanded rises.
Term
Related goods demand determinant (subs & comps)
Definition
PB & J:
If Price of one rises, demand for the other decreases
If price of one falls, the demand for the other increases

Coke and Pepsi:
If price of one rises, demand for other increases.
If price of on falls, demand for other decreases.
Term
Elasticity of demand (definition & formulas)
Definition
a. Responsiveness by consumers
b. It measures the % change in quantity demanded that results from a % change in price
Term
Price Floor (def, graph, examples)
Definition
Minimum legal, price helps producers…ex. Agriculture)
Term
Price ceiling (def, graph, examples)
Definition
Max Legal Price, helps consumer… ex. Rent controls, WWII)
Term
Perfect Competition (characteristics)
Definition
i. Many buyers & Sellers
ii. Identical product (perfect Substitutes)
iii. Perfectly informed buyers/sellers
iv. Free entry & exit
v. Independent buyers & sellers, no control over price
Term
Pure Monopoly (characteristics)
Definition
i. Single seller
ii. Unique product, no close substitutes
iii. Barriers to entry (restricted/regulated)
iv. Complete control over price
Term
Oligopoly (characteristics)
Definition
i. Few Sellers
1. (2-4 largest control over 70%)
ii. Standardized or differentiated
iii. Barriers to entry
1. Cost
iv. Some price control
Term
Monopolistic competition (characteristics)
Definition
i. Many firms
ii. Differentiated product
iii. Few Barriers
iv. Slight price control
Term
Horizontal Merger
Definition
the joining of companies that offer the same or similar products or services
Term
Vertical merger
Definition
the combining of companies involved in different steps of production or marketing of a product or service
Term
Money
Definition
Something worth and used to pay
Term
Commodity Money
Definition
• Has value based on what it is made of
Term
Representative Money
Definition
• Money that can be exchanged for something else of value
Term
Fiat Money
Definition
• Has value only because the government has issued a Fiat, or order, saying this.
Term
Fractional Reserve Banking
Definition
• A system of banking that requires banks to hold a fraction of a deposit; the bank may loan out the rest.
• The fraction that must be held is called the Required Reserve Ratio (RRR)
Term
GDP (def. with 3 requirements)
Definition
• Total market ($) value of all final goods and services produced within a nation’s borders in a given time period.
Term
Business Cycle
Definition
• Changes in a market's economic system
Term
Frictional Unemployment
Definition
a. Temporary, people changing jobs
b. Normal process of jobs being created and destroyed
Term
Structural Unemployment
Definition
a. Linked to seasonal work
Term
Seasonal Unemployment
Definition
a. Jobs do not match up well with the skills of those looking for work
b. Usually due to technology
Term
Cyclical Unemployment
Definition
a. Caused by a part of the business cycle
b. Follows economy
Term
Inflation
Definition
when prices rise
Term
Fiscal Policy and two tools
Definition
- When the federal government changes taxes and government spending to affect the economy.
- Expansionary & Contractionary Fiscal Policy's
Term
Monetary Policy & Tools
Definition
When the Fed changes the Money Supply to influence the economy

Tools:
1. Buying and selling bonds
2. Reserve Requirement (RRR)
3. Interest Rates
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