Economics Chapter 3 – American Free Enterprise – Flashcards
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Profit Motive
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- the force that encourages people and organizations to improve their material well-being - rewards innovation by letting creative companies grow and improves productivity by allowing more efficient companies to make money
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Open Opportunity
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- the concept that everyone can compete in the market place - allows economic mobility up or down
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Legal Equality
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the concept of giving everyone the same legal rights
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Private Property Rights
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the concept that people have the right and privilege to control their possessions as they wish 5th Amendment & 14th Amendment prevent government from taking property away from individual except when there is a public reason - which they HAVE TO PAY FOR IN FAIR VALUE.
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Free Contract
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the concept that people may decide what agreements that want to enter into
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Voluntary Exchange
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the concept that people may decide what and when they want to buy and sell - Free Enterprise stops them from being forced
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Competition
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the rivalry among sellers to attract customers while lowering costs
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Interest Group
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a private organization that tries to persuade public officials to act or vote according to group members' interests
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Public Disclosure Laws
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laws requiring companies to provide full information about their products
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Public Interest
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the concerns of the public as a whole
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Macroeconomics
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the study of the behavior and decision making of entire economics
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Microeconomics
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the study of the economic behavior and decision making a small units, such as individuals, families, and business
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Gross Domestic Product
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the total value of all final goods and services produced in a particular economy
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Business Cycle
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a period of macroeconomic expansion followed by a period of contraction
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Work Ethic
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a commitment to the value of work and purposeful activity
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Technology
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the process used to produce a god or service
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Public Sector
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the part of the economy that involves the transactions of the government
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Private Sector
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the part of the economy that involves the transactions of individuals and business
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Free Rider
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someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it benefits of it anyway if it were provided as a public good
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Market Failure
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a situation in which the market does not distribute resources efficiently
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Externality
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a economic side affect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume
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Poverty Threshold
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an income level below that which is needed to support families or household
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Welfare
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government aid to the poor
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Cash Transfers
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direct payments of money to eligible poor people
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In-Kind Benefits
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goods and services provided for free or at greatly reduced prices
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What are Constitutional Protections of Free Enterprise
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Property Rights Taxation
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Basic Principles of Free Enterprise (3 of them)
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- *Profit Motive* - *Open Opportunity* - *Economic Rights*
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Who and what is Alice Rivlin?
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She's a human. A human who supports government programs that increase productivity and shuns direct federal spending and tax policy. You go Alice Rivlin.
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Economic Rights
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Legal Equality
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Economic Citizenship
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Your elective choices as a voter help guide economic policy of the government. Basically your vote as a citizen for the economy.
