understanding economics chapter 2 – Flashcards
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traditional economy
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economic system in which the allocation of scarce resources, and other exonomic activity is the result of habit or custom
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stagnation
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lack of movement
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economic systems
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organized way a society provides for the wants and needs of its people
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command economy
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economic system characterized by central authority that makes most major economic decisions
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socialism
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economic system in which government owns some factors of production and has a role in determining what and how goods are produced
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emphasizing
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stressing
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market
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meeting place or arrangement through which buyers and sellers interact
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market economy
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economic system in which supply, demand, and the price system help people allocate resources and make the WHAT, HOW, and FOR WHOM to produce decisions, same as free enterprise system
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capitalism
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economic system in which private citizens own and use the factors of production to generate profit
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mixed economics
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economic system that has some combination of traditional, command, and market economies; also see modified free enterprise economy
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Great Depression
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worst period of economic decline in U.S. History, lasting from approximately 1929-1939
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allocation
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distribution
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communism
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economic and political system in which factors of production are collectively owned and directed by the state; a theoretical classless society in which everyone works for the commin good
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GDP per capita
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gross domestic product on a per person basis; can be expressed in current or constant dollars
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privatization
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conversion of state-owned factories and other property to private ownership
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undertaking
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enterinting into an activity
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vouchers
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certificates that could be used to purchase government-owned property during privatization
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Five-Year Plan
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comprehensive, centralized economic plan used by the soviet union and china to coordinate development of agriculture anf industry
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Gosplan
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central planning authority in the former soviet union that devised and directed Five-Year Plans
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collectivization
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forced common ownership of factors and production; used in the former soviet union in agriculture and manufacturing
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perestroika
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fundamental restructuring if the soviet economy; policy introduced by Gorbachev
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Great Leap Forward
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Chinas second Five-Year Plan, begun in 1958, which forced collectivization of agriculture and rapid industry
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isolationism
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national policy of avoiding international alliances and economic intractions
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nationalization
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shift of an economy, or part of an economy, from private ownership to government ownership
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solidarity
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independent Polish Labor union founded in 1980 by Lech Walesa
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European Union
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established in 1993 by the Maastricht Treaty, its 28 member countries make it the largest single unified market in the world in terms of population and output
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black market
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market in which goods and services are sold illegally
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capital-intensive
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requiring large amounts of capital in relation to labor
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keiretsu
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independently owned group of Japanese firms joined and governed by an external board of directors in order to regulate competition
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population density
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number of people per square mile of land area
