Economy Chapter 6
Quote by Karl Marx
"The history of all hitherto existing society is the history of class struggle"
What 2 questions determine whether a nation follows a more capitalistic or socialistic philosophy?
1) Who owns the nation'a factors of production? 2) Who answers the 3 economic questions?
5 strategies of mercantilism
1) exploration 2) trade 3) domestic manufacturing 4) colonization 5) alliances/treaties/conquest
What are the 3 principal functions of gov't?
1) the gov't is to protect its citizens from foreign aggression 2) the gov't is to protect the rights of its citizens from infringements by others 3) the gov't is to provide public goods
Three economic questions
1) what will the nation produced? 2) how will the nation produce it's goods? 3) Who will receive at the nation produces
In what year did mercantilism end in America?
1776
nationalization
A central authority controls resources and makes economic decisions
What is a public good give an example.
A good or service that the nations people benefit from ex: highways
Over which of the following would a social democracy be least likely to assume control?
A shoe factory
Wealth of nations
Adam Smith refuted mercantilism
classic liberal capitalism
Adam Smith's ideal economic system
According to Adam smith, what was the root problem with mercantilism
Adam smith believed the root problem with mercantilism that money is wealth
According to Adam Smith, why do the butcher and baker provide our dinner?
Because it is in their own best interest to do so
Why do public goods often become the responsibility of the government
Because they would either not be available would be available but not affordable will be available but not consistently reliable
Socialists
Central authority committee or people in common generally on the factors of production make decisions
capitalism
Economic system characterized by private ownership and decision making
welfare state
Economic system that leans toward capitalism but has extremely high taxes
Why did mercantilism promote colonizing
Encourage colonizing new territories to acquire new supplies of the factors of production
mercantilism
Gold and silver in the government's treasury are what is important
communism
Government is no longer necessary since everyone is acting in the best interest of others
Name the factors of production
Land labor capital entrepreneurship
What does laissez faire mean?
Let alone
Capitalists
Private individuals on most of the factors of production and make most economic decisions
state capitalism
Private ownership of businesses but with frequent gov'tal intervention
In which if the following economic systems does the gov't not exist?
Pure communism
privatization
The gov't sells businesses back to private individuals
socialism
The gov't takes possession of key industries
social democracy
Transitional economic system between free markets and governmental ownership
Favorable balance of trade
When a nation sells more goods than it purchases
What is NOT one of the distinguishing characteristics of a capitalistic economy?
Workers decide all questions of policy for their particular business
