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8 Cards in this Set
- Front
- Back
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5 Rules for a Market Economy
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-private property rights
-intellectual property rights -measurement and safety -prevent negative externalities (pollution) -regulate natural monopolies, ban other monopolies |
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the business cycle
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regular fluctuations of an economy
four phases: expansion, peak, recession, trough peaks=inflation troughs=unemployment |
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fiscal policy
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the federal governments use of taxing and public spending to influence the national economy
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monetary policy
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the central banks attempts to control the money supply to influence the national economy
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four categories of goods
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private- goods with two features: the amount consumed by one person is unavailable to others and nonpayers can easily be excluded
public- goods that once produced, are available to all, but nonpayers are not easily excluded quasi-public- goods that, once produced, are available to all but non payers are easily excluded open access- goods that are rival in consumption but exclusion is costly |
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externalities
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negative- by-products of production or consumption that impose costs on third parties, neither buyers nor sellers (pollution)
positive: by-products of consumption or production that benefit third parties, who are not buyers or sellers (inoculation, education) |
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why poverty exists
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-fewer earners per household
-for any one person, they may not have enough resources to sell -age and education are key factors |
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government programs that fight poverty
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social insurance- cash transfers for retires, the unemployed, and others with a work history and a record of contributions to the program
earned income credit- supplements wages of the working poor -> idea is to increase income and provide incentives for people to work means tested- a households income and assets must fall below a certain level to qualify for benefits; federal govt. pays for 2/3, state and local govts. fund 1/3 |
