Term
| Does society have insatiable desires and demands? |
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Definition
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Term
| Society must make which decisions? |
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Definition
1.What goods or services will be produced?
2.How will the good and services be produced?
3.To whom will goods and services be delivered? |
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Term
| Government is involved with which decisions? |
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Definition
1.Fiscal policy
2.Monetary policy
3.Regulatory policy
4.Trade policy |
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Term
| Types of political economies |
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Definition
1.Mercantilism (gain a colony and control it, or give a monopoly and use it) *government gives business monopoly to control trade –not free trade-
2.Capitalism
3.Socialism
4.Mixed economy |
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Term
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Definition
i.Limited government intervention since the market is self-adjusting (“invisible hand”)
ii.The market will achieve full employment, maximum productivity and stable prices. |
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Term
| 20th century challenges to classical economics |
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Definition
i. Marxist revolution (in Russia)
ii. The Great Depression |
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Term
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Definition
1.Fascism and Communism
2.Keynesian Economics
3.Fiscal Policy
4.Monetary Policy |
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Term
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Definition
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Term
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Definition
a.Fiscal and monetary policy can promote full employment
b.Dominated U.S. policy until the 1980’s |
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Term
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Definition
a.During economic downturns: tax less and spend more
b.During prosperous economic times: tax more and spend less |
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Term
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Definition
a.During economic downturns: increase the money supply
b.During prosperous times: restrict the money supply |
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Term
| The failure of central planned economy |
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Definition
Stagflation
Supply-side economics
Monetarist theory
Fiscal policy |
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Term
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Definition
1.High inflation
2.High unemployment |
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Term
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Definition
1.Productivity triggers economic growth that increases supply and decreases prices
2.Government spending crowds out private investment and increases interest rates. |
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Term
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Definition
1.Hold the monetary rate to the same rate as the economy’s growth
2.Too much money causes inflation
3.Too little money causes recessions |
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Term
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Definition
1.Presidency
a.OMB – Annual Budget
b.Council of Economic Advisors
c.Treasury Department
2.Congress
a.Appropriations
i.Mandatory spending
ii.Indexing
b.Levy Taxes
i.Income tax
ii.Progressive tax
iii.Regressive tax
c.Borrow money |
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