| A | B |
|---|
| what are the 3 questions asked when deciding how to use resources? | What to produce, how to produce, for whom to produce |
| what are the three types of exchange? | barter, money, credit |
| what are 3 characteristics of money? | standardized item, measure of value, store of value that can be stored and used later |
| who is Adam Smith? | father of capitalism, wrote Wealth of Nations, wanted no gov't interventon, was opposed to mercantalism and monopoly |
| what schools did adam smith go to? | oxford and Glascow |
| what universities did adam smith teach at? | GLASCOW AND eDENBOROUGH |
| who believed in natural order of the market (that it is self regulating)? | adam smith |
| what was smith's idea of 'invisible hand'? | by pursuing their own self interests, ppl automatically create the gr8est good for gr8est number |
| what ystem of economics does Japan have? | capitalist but w/ much gov't involvement |
| Germany's economic system is? | capitalist w/ many gov't controls |
| where did many welfare programs originate? | Germany |
| what ec. system is in France? | capitalist, relying on indicative planning |
| what's unusual about capitalism in singapore? | gov't regulates apects of personal behavior |
| what is most heavily unionized country? | sweden |
| what party revolted in Russia in 1917 nd under who? | Bolsheviks, Lenin |
| who was the first president of Russia? | Yeltsin |
| when did china become communist and under who? | 1949, Mao Zedong |
| what was china's second 5 yr plan? | Great Leap Forward |
| what country had Four Modernizations? | China |
| what chinese policy was similar to feudalism? | household/contract responsibilty system |
| what are 5 benefits of the price system | information, incentives, choice, efficiency, and flexibility |
| what are 3 limitations of price system? | externalties, public goods, instability |
| externalties | can be negative or positive; person who does not make or consume product bears cost of production (ex pollution); when person who does not sell/buy product benefits such as business for restaurant near factory because workers eat there |
| what happens if the demand shifts to the right? | ppl are willing to buy more and price & supply go up |
| what happens when supply shift 2 right? | more supplied and price goes up |
| Thorstein Veblen | conpicuous consumption (copying the wealthy), social competition drives economy; norwegian ancestry, born in wisconsin |
| Veblen effect | purchaseof exclusive stylish items |
| snob effect | purchase of expensive stylish items |
| what is oldest, simplest, most common type of business org.? | sole proprietorship |
| what is difference between general and limited partnerships? | general: partners are equal and have unlimited liability; limited: partners do not take active role in in business, limited liability |
| what is liscense for corporation called and what must u file in order to get it? | file articles of incorporation to get corporate charter |
| merger of 2 companieswho produce same product (and same stage) | horizontal combination |
| merge of 2 companies making same product but at different stages | vertical combination |
| cooperative is what? | owned collectilvely by members |
| what is money available after taxes? | disposable income |
| benefits of saving? | security, interest |
| what is the percentage of disposable income that is not spent? | savings rate |
| how is financial investment different from real investment? | in financial, no actual good is made; new capital good is created in real investment |
| what makes stock price rise and fall? | when many buyers compete for scarce stock, price goes up; interest rates, inflation, elcetions also effect this |
| what is term for interst on money owed to bond holder? | yield |
| what is say's law? | production of any commodity automatically creates market; JB Say |
| who was Keynes? | saw that when business fell, might not repair itself; gov't intervention sometimes necesary |
| who wrote ECONOMIC CONSEQUENCES OF THE PEACE and THE GENERAL THEORY OF EMPLOYMENT, INTEREST, AND MONEY? | Keynes |
| what is the business cycle? | rise and fall of production |
| what department store did macy' beat out? | Gimbel |
| what term refers to the odds that u will get ur money ack from investments? | safety |
| what was the largest bankruptcy in the history of wall st.? | drexel burnham |
| what is the difference btween real GDP and current (nominal) GDP? | real is adjusted for price changes, nominal (current) expresses it in current prices [thus less accurate ind.] |
| what are some limitations of GDP? | initial figures inaccurate, things not inmarket not included (ex. babysitting), things that make economy look "good" may not apear but those that make it look "bad" may |
