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70 Cards in this Set
- Front
- Back
The Basic problem in Economics
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Scarcity
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Exported
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Sold to other countris
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Imported
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Purchased from abroad
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Why Nations Trade
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To obtain goods they cannot produce, To reflect comparative advantage , and to create jobs
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Comparative Advantage
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The ability of a country to produce a good at a lower cost than another country can.
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EX of comparative Advantage
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TVS cheaper to make in china then USA so we buy most of our tvs from china therefore to have comparative advantage
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Comparative advantage allows nations to :
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Speacialize
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Specialization
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Something a country can make better than other countries
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Specialization can sometimes lead to
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Overproduction
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Tariff
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Customs duty , a tax on imported goods
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Customs duty
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tariff
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Quotas
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limits on the amount foreign goods imported
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Free Trade
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Policy of reduced trade barriers
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EU
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The European Union
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An organization of independent European Nations
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European Union
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Their Combined GDP is almost as large as the United Stattes
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The European Union
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Combined GDp
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Total dolar value of all final goods and services produced
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No trade barriers where?
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In european union
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All countries in the European use what?
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The euro
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All countries in the european use the euro except for?
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The UK, Denmark, and Swedeen
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NAFTA
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THE North American Free Trade agreement
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Who is apart of NAFTA
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Canada, Mexico and the united states
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WTO
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World Trade Organization
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WTO does what
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Oversees trade among nations. Organizes negotiations about trade rules and provides help to countries trying to devlelop their economy.
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Uses the peso
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Mexico
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Japan money
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Yen
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Exchange rate
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what the price of your nations currency is in terms of another nations currency
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The BALANce of trade
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is the difference bbetween the value of a nations exports and its imports
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If a nations currency depreciates or becomes "weak" the nation will most likely
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export more goods because its producst will become cheaper for other nations to buy and vise versa
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Trade Deficit
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value of the products imported by a country exceeds the value of its exports
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Trade Surplus
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the value of the products exported by a country exceeds the value of its imports
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What is the UNITED States economic system based off
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Market system
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All Socities face the basic questions of :
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What to produce , how to produce it and for whom to produce it for.
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Another name for Capitalism
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a market economy
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Market Economy
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System in which individuals own the factors of production and make economic decsions through free interaction
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the whom , what , how are decided in a free market based on the interaction of supply and demand
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in a Market Economy
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One of the chief characterisics of a market economy is `that :
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Private citizens not the gov own the factors of production
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Is a market economy decentrailized-decisions are made by all the people in an economy not a few
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YEs
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The Are no what kind of economys in the world?
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Pure market economys
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externalities
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Unintended side effects that have an influence on third parties
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ex of negative externalities
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Second hand smoking , drunk driving
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The majority of the largest economies in the world today are
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Market economies
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per capita GDP
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Gross Domestic Product per pseron
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Per Capita divides:
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Total GDP by the countries populatio
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Most countries that have the highest gdps have BLANK economies
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Market
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Opposite of the market economy
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the command economy
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In this type of economy the individual has little if any influence over how the basic economy functions
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Pure command economy
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Under this system the mjr economic decisions are made by the central gov. The gov. tells producers what to do and commands the actions they should take.
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command economy
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This system is also called a controlled economy
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command economy
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the term communism applies to what kind of economies?
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Command economies
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The belief that the means of production should be owned and controlled by society, either directly or through the government. People who liked this system felt the wealth should be spread equally
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Socialism
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A socialist who advocated violent revolution, THis person believed that eventaully socialism would evolve to full comunism he called his ides the "scientific socialism"
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Karl Marx
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A german thinker
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Karl Marx
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Under BLANK one class would evolve , property would all be held in common , and there would be no need for gov.
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Communism
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In a BLANK economy most productive rescoureces especially land and capital are owned by gov.
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Command
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The command economy has BLANK basic allocation decisions to answer
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3
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The command economy had 3 basic allocation decisions to answer theyare:
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what to produce , how goods will be produced, For whom they will be produced
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Two examples of command economies
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Cuba and North Korea
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command economies generally have Blank GDPS
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low
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BLANK combines basic elements of a pure market economy and a command economy.
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A mixed economy
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Most countries with mixed economies combine:
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Private ownership of property , and individual decision making combined with government intervention and regulations
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Main reason for a transition from one economy to another:
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the remarkable success of the major market economies of the world. Market economies have prospered , other countries want that success
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The Soviet union collapsed in
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1991
Communist leaders could no longer keep the economy going |
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Main economic decision in russia during soviet times were made by a planning body called the
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Gosplan
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countries whose average per capita income is only a fraction of that of most industrialized countries
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Developing countries
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Most countris trying to make transitions have economies
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traditional economies
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Things are done ,"The way the have always been done"
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Traditional economies
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Economic decisions are based on custom or habit
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Traditional economies
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Problems developing countries face:
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-High rate of population growth
-Geography<- No access to trade routes and natural resources <- might lack -Problems left over from wars <- destroyed buildings, reconstruction -Severe debt <- might have borrowed large sums of money to spur economic growth -Corruption<- gov officials |
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Organizations that exist to help countries develope and overcome obstacles: *************
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The Internationsl Monetary Fund (IMF)
International bank for reconstruction and development (WORLD BANK) |