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29 Cards in this Set
- Front
- Back
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In a centrally planned economy, who owns both the land and capital? |
The government owns both the land & capital. |
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How does it own the labor too? |
by controlling where individuals work & what wages they are paid |
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What two major market forces that are absent from this system? |
Self-interest & competition |
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What two words are often associated with centrally planned economies? |
Socialism and communism |
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What is socialism? |
a social & political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society |
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Who owns the major industries under socialism? Give an example. |
government owns the major industries & utilities example |
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How is communism characterized? |
by a centrally planned economy with all economic & political power resting in the hands of central gov |
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What does authoritarian mean? |
Requiring strict obedience to an authority |
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The Soviet Union arose out of a pair of revolutions in which country & in what year; who led the Bolsheviks and in what year did the Soviet Union collapse? |
in Russia in 1917 & Bolsheviks led by Vladimir Lenin & collapsed in 1991 |
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On State run farms who provided all the equipment, seed, and fertilizer, and for what did the farmers work? |
The state provided & farmers worked for daily wages set by economic planners |
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What is a collective? |
Large farms leased from the state to groups of peasant farmers |
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What were agricultural workers guaranteed? |
guaranteed employment & income, the gov established quotas and distribution |
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In Soviet Industry, what three areas of the economy did the planners favor? |
favored the defense industry, the space program, and heavy industry |
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Due to the answer to the above question (#13) the makers of the consumer goods and services paid the opportunity cost of this concentration of resources. What were they stuck with? |
Stuck with leftover, lower-quality resources with which to create their produces |
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Industry was characterized by a lack of incentives. List the lack of incentives. |
incentives were jobs were guaranteed, wages were set by the government, workers had little incentive to work harder or innovate |
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What is said about consumer goods? |
Too scarce and usually of poor quality |
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On page 37, what does the book list as a “luxury?” |
Meats |
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In 1928, Soviet leader Joseph Stalin instituted ____ & in which industry did it have some success? |
Instituted the first of several five-year plans to boost production & success in heavy industries |
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In 1928, Soviet leader Joseph Stalin instituted ____ & in which industry did it have some success? |
Instituted the first of several five-year plans to boost production & success in heavy industries |
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“Perhaps the greatest disadvantage of centrally planned economies is that their performance almost falls far short of the ideals upon which the system is built.” After this sentence on page 38, a list of reasons as to why the system cannot meet consumer needs and wants is given. List them. |
gov owns all production factors, workers lack any incentive to work hard, also system doesn’t reward innovation which discouraging any kind of change |
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What is the laissez faire? |
Doctrine that gov generally should not intervene in the market place. |
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How much does the U.S. government pay how many employees? |
U.S. gov pays 2.8 million employees about 9.7 billion a year |
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How many miles of road are provided by the government of the U.S.? |
4 million miles of road |
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According to the outer ring on page 42, from where does gov collect taxes? |
from both households and businesses |
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What is the greatest expenditure of the U.S. gov.? |
Social Security |
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What is the foundation of the U.S. economy? |
Free market |
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Who determines investments in a free market? |
By private sections rather than by state control |
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What percentage of North Korea’s goods is owned by the state? |
95% |
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The last paragraph on pg.44 describes the U.S. economy. What does it say about private property, foreign investment, banking foreign-owned banking? |
U.S. law protects private property/ foreign investment is encouraged/ banking industry operates under relatively few restrictions and foreign-owned banks have few additional restrictions |
