Concepts Related To Economics

Front 1

Supply

Back 1

Schedule of quantitiesoffered for sale at all possible prices in a market.

Fact: Law of supply and demand.

Front 2

Demand

Back 2

Combination of desire, ability, and willingness to buy a product.

Fact: Law of supply and demand.

Front 3

Break even point

Back 3

Production needed if the firm is to recover its costs; production level where total cost equals total revenue.

Fact:the break-even point in sales dollars is $800,000 [$480,000 divided by 60%]

Front 4

Factors of production

Back 4

Productive resources that make up the four categories of land, capital, labor, and entrepreneurship.

Fact: the land category is the natural resources

Front 5

Economic cycle

Back 5

The natural fluctuation of the economy between periods of expansion (growth) and contraction(recession).

Front 6

Welfare State

Back 6

Program whereby a governmentor private agency programs that provide general economic and social assistanceto needy individuals.

Fact:Modern welfare states include the Nordic countries, such as Iceland, Sweden, Norway, Denmark, and Finland

Front 7

Neoliberalism

Back 7

An approach to economics andsocial studies in which control of economic factors is shifted from the publicsector to the private sector. Drawing upon principles of neoclassical economics, neoliberalism suggests that governments reduce deficit spending, limit subsidies, reform tax law to broaden the tax base, remove fixed exchange rates, open up markets to trade by limiting protectionism, privatize state-run businesses, allow privateproperty and back deregulation.

Fact: It emerged among European liberal scholars in the 1930s in an attempt to trace a ‘Third’ or ‘Middle Way’ between classical liberalism and socialist planning.

Front 8

Globalization

Back 8

The tendency of investment funds and businesses to move beyond domestic andnational markets to other markets around the globe, thereby increasing theinterconnectedness of different markets. Globalization has had the effect ofmarkedly increasing not only international trade, but also cultural exchange.

Fact: Major factors include steam locomotive, steamship, jet engine, container ships, etc.

Front 9

Regionalism

Back 9

Institutional arrangementsdesigned to facilitate the free flow of goods and services and to coordinateforeign economic policies between countries in the same geographic region.

Front 10

Trade embargo

Back 10

Prohibition on the export orimport of a product.

Fact: an example is the situation between the commerce in the US and Cuba.

Front 11

Economic integration

Back 11

An economic arrangementbetween different regions marked by the reduction or elimination of tradebarriers and the coordination of monetary and fiscal policies. The aim of economic integration is to reduce costsfor both consumers and producers, as well as to increase trade between thecountries taking part in the agreement.

Fact: The theory was by Jacob Viner in 1950, it defined the trade creation and trade diversion effects, etc.

Front 12

Free Trade Agreement

Back 12

Treaty (such as FTAA or NAFTA)between two or more countries to establish a free trade area where commerce in goods and services can beconducted across their common borders, without tariffs or hindrances but (incontrast to a common market) capital or labor may not move freely.

Facts: They reduce barriers to U.S. exports, and protect U.S. interests. They enhance the rule of law in the FTA partner country.

Front 13

Quota

Back 13

Limit on the amount of a goodthat can be allowed into a country.

Fact:Smuggling - the illegal transfer of goods into a country - is a negative side effect of quotas and tariffs.

Front 14

Tariff

Back 14

Tax placed on an imported product

Fact:Tariffs can lead to trade wars as exporting countries reciprocate with their own tariffs on imported goods.

Front 15

Inflation rate

Back 15

Is the rate at which the general levelof prices for goods and services is rising and, consequently, the purchasingpower of currency is falling.

Fact:Inflation is more likely to have a significant negative effect, rather than a positive effect, on a currency's value and foreign exchange rate.

Front 16

GDP

Back 16

It is the monetary value ofall the finished goods and services produced within a country's borders in aspecific time period.

Front 17

Overproduction

Back 17

Excess of supply over demandof products being offered to the market.

Facts: John Maynard Keynes formulated a theory of overproduction, which led him to propose government intervention to ensure effective demand.

Front 18

sources:

Back 18

http://www.accountingcoach.com/blog/what-is-the-break-even-point

https://en.wikipedia.org/wiki/Regionalism_(politics)

https://en.wikipedia.org/wiki/Overproduction#Say.27s_Law

http://www.investopedia.com/terms/q/quota.asp