| A | B |
|---|
| developing country | A country not included in the high income nations of the world (Top 16%) |
| Economic Catagories | Low-income (20%), Middle-income (66%), High-income (16%) |
| Characteristics of Low-income | Inequality, Health-education, Unemployment, Agricultural reliance |
| Human Development Index (HDI) | Uses life expectancy, educational attainment, and purchasing power of GDP as indicators. |
| Third world countries | This is what developing countries are sometimes referred as. |
| migration | This contributes to high unemployment within developing countries. |
| economic development | A process that produces sustained and widely shared gains in per capta rGDP |
| Malthusian Trap | A point at which the world is no longer able to meet the food requirments of the population, and starvation becomes the primary check to population |
| Thomas Malthus | He published, "Essay on the Principle of Population" about popultion growth and its collision with diminishing returns. |
| demographic transition | Situation in which population growth rises with a fall in death rates and then falls with a reduction in birth rates. |
| dependancy theory | The idea that poverty in develpping nations is the result of their dependence on high income nations. |
| import substitution | A strategy of blocking most imports and substituting domestic production of those goods. |
| Lorenz curve | A curve that shows cumulative shares of income received by individuals or groups. |
| education | This is has been suggested as the primary key to social mobility and income inequalty |
| income inequality | The extent which income is distributed in an uneven manner among the population. Concentrating in the upper class. |
| doubling rate | Developing nations experience extreme growth, and suggests a popultion doubling every 31 years. |
| developing country tendancies | Market economies, rule of law, investment and saving, |
| NAFTA | North American Free Trade Association, Helped Mexico begin free trade policies. |
| Gini coefficient | This measures the ratio between the line perfect inequalty (0) and perfect equality (1). |
| income mobility | Ability for individuals to move out of income brackets they were born in. |
| Roots of inequality | Family structure, technological change, tax policy |
| Poverty | Two approaches: Absolute poverty test, or income falling below a specific level; relative income test, Income falls in relation to everyone else. |
| Gender develpment index | Uses the same variables as the HDI, but adjusts them downward to take into account the extent of gender inequality. |
| Human Poverty Index | Measures human deprivation and includes indicators as the percentage of people expected to die before age 40, the percentage of underweight children under age 5, percentage of adults who are illiterate, and the percentage of people that live in poverty. |
| Karl Marx | Auther of the Communist Manifesto and Das Kapital who stressed the historical approach to study of economics amd believed that capitalism was a step on the path towards communist utopia. |
| labor theory of value | Theory that states that the relative values of different goods are ultimately determined by the relative amounts of labor used in their production. |
| surplus value | The difference between the price of a good or service and the labor cost of producing it. |
| Bernie Sanders | Democratic socialist running for the Democratic Party nomination for president in 2016. |
| Joseph Stalin | Former leader of the Soviet Union who seized private resources and captial and eliminated opposition to consolodate power. |
| Poland | First of the Soviet bloc countries in Eastern Europe to break away from communism and begin a capitalist market system. |
| Berlin Wall | Often seen as the culminiation of the Soviet collapse in Eastern Europe in November of 1989. |
| Mao Zedong | Comunist leader in China 1949 who followed Stalin's pattern of rapid nationalization of resources. |
| Great Leap Forward | Shifted the focus to labor-intensive development and household industry in China |
| Five-year plan | Launched in 1953, stressed captial production and heavy industry development in China. |
| Deng Xiaoping | Moderate who took over the leadership in China in 1976 and brought a market economy to China. |
| Tiananmen Square | Civil protests that brought discontent to the surface in China. |
| Great Depression | Longest economic recession in US history that lasted from 1929-1941 |
| David Ricardo | 19th century British economist who emphasized classical economics. |
| Classical economics | Emphasized abilitiy of flexible wages and prices to keep the economiy at or near its natural level of employment. Focuses on the self-correction of long-term economics over short-term factors. |
| Keynesian economics | Changes in aggregate demand can create gaps between the actual and potential levels of output, and that such gaps can continue in the long term |
| John Maynard Keynes | British economist that wrote the 1936 book, The General Theory of Employment, Interest, and Money. Dismissed the long-term self-correction theories as irrelevant. |
| Keynesian economics | Stresses the use of fiscal and monetary policy to close gaps, as prices and wages tend to be ÒSticky.Ó |
| Great Depression causes | 1. Lack of consumer confidence, Stock Market Crash 2. High taxes reducing investment 3. High tariff barriers |
| Smoot-Hawley Tariff Act | Tariff aimed at foreign imports and meant to protect American domestic production. Caused retaliatory trade barriers. |
| Franklin D. Roosevelt | President during much of the Great Depression rejected fiscal policy in controlling the economy, eventually authorizing expanzionary military spending in preparation for World War II. |
| World War II | This event was the greatest factor in bringing an end to the Great Depression. |
| John F. Kennedy | Was the first president to use Fiscal policy to manipulate Aggregate Demand. |
| Lyndon B. Johnson | After seeing through JFK's tax cuts, He increased spending in two ways: 1. Great Society domestic programs, such as Medicare, 2. Escalation of the Vietnam War. |
| Richard M. Nixon | He was elected to office in 1968 and inherited a booming economy and high inflation. He would be forced from office due to the Watergate scandel. |
| Monetarism | Theory tahat price changes were a result of changes in the money supply. Movement led by Milton Friedman. |
| New Classical Economics | Macroeconomic analysis built from analysis of individual maximizing choices. The only monetary policy that works is surprise monetary policy. |
| Rational expectations hypothesis | Individuals form expectations about the future based on the information available to them, and that they act on those expectations. |
| New Keynesian economics | Stresses need for activist stabilization policies to keep economy close to potential output at all times. Incorporates monetarism and new classicism, Focuses on the stickiness of prices in the long run. |
| Stagflation | the combination of inflation with slow growth and high unemployment |
| Jimmy Carter | Became president in 1976, Inflation hit the highest level in the 20th century. |
| Ronald Reagan | He trippled the federal deficity with defense spending. He focused on supply-side or trickle-down economic policy. He is known for his expansive tax-cut package. |
| George H. W. Bush | Followed Ronald Reagan as president in 1989, know for making the statement "no new taxes" then promptly rasing them costing hin the election in 1992. |
| William D. Clinton | He predised over the longest unbroken economic expansino in US history and achieved a surplus in the federal budget. |
| George W. Bush | US president during the Great Recession in 2007 caused by a sudden drop in the housing market. The job market was weak and the national debt doubled. |
| Barack Obama | Inherited a worse economic situation than any president since FDR. Passed an $800 billion stimulus package targeted to help banks and domestic automobile companies. |
