2.3- Planned Economies
This is another name for a centrally planned economy
What is a command economy?
This French term means government should leave the economy alone.
What is laissez-faire?
The drive to make money that fuels entrepreneurship.
What is the profit motive?
This branch of economics studies the whole economy and indicators like GDP.
What is macroeconomics?
Roads and bridges are examples of these.
What are public goods?
One major characteristic of command economies is that this group controls the factors of production.
Who is the government?
National defense is an example of a service usually provided by this sector.
What is the public (government) sector?
The principle that everyone can compete in the marketplace.
What is open opportunity?
This branch focuses on individual markets and decision-makers.
What is microeconomics?
Public goods are financed this way.
What is through taxes?
Both communism and socialism share this belief about key resources.
What is public ownership or control of key industries?
In the factor market, the government acts in this role to hire labor.
What is a buyer/employer?
The right to own and control possessions as one chooses.
What are private property rights?
Economic growth is usually measured by increases in this statistic.
What is Gross Domestic Product (GDP)?
The government takes on some responsibilities, and not the private sector, because of this reason.
What is it is not profitable or efficient and the private sector would lose money on the project.
This system allows more political pluralism and mixed ownership than communism.
What is socialism?
In the product market, government acts by doing this with goods and services.
What is buying and providing goods and services?
The idea that people can make agreements and contracts freely.
What is a free contract or economic freedom
Low unemploymen, growth, and WHAT _______ are the three main goals of this area of economics.
What is stability?
When I purchase an overpriced 4-pack of Celsius at the Target self-service, I am engaging with this sector of the economy.
What is the private sector?
The Soviet Union mostly invested in these sectors.
What are heavy industry and defense?
Social Security and SNAP are examples of these government money transfers.
What are transfer payments?
When buyers and sellers engage willingly in transactions.
What is voluntary exchange?
Stability is measured by these two things
What is the security of financial institutions and the general level of prices (inflation)?
When you road trip through Wisconsin and you drive on Interstate 43 on your way to Chicago so you can go the the McDonalds that serves all the food that McDonalds sells around the world, economists would call you this.
What is a free-rider?
These shortages were a major consequence of the Soviet investment strategy.
What are shortages of consumer goods?
Americans generally expect government to protect rights, regulate where needed, and provide this safety measure.
What is a safety net?
The government’s power to take private property for public use with fair payment.
What is eminent domain?
What is 6% (this is from your reading)?
A specific situation where the free market does not distribute resources efficiently.
What is a market failure?
These reforms in the 1970s helped China’s economy grow.
What are market-oriented reforms (opening to trade and investment)?
This is why economies end up “mixed.”
What is because both markets and governments have strengths and weaknesses?
Laws that require companies to share key information with consumers.
What are public disclosure laws?
If layoffs (corporate downsizing) and inflation are INCREASING, is this a sign of a healthy or unhealthy economy?
What is an unhealthy economy?
Decreased traffic congestions and cleaner air result from new bus stops that were constructed in SW Minneapolis. THis is an example of a...
What is a positive externality?
Bad incentives and poor information in command economies often lead to this major problem.
What is misallocation of resources?
Helping students afford college is an example of this government goal.
What is promoting long-run growth and equity?
The consumer’s power in the free enterprise system is often described this way.
What is “voting with their dollars”?
This political party was in power during the United States' most prosperous economic periods of growth (as per the chart we examined in class).
What is the democratic party?
Noise pollution from the new bus stop that was put on the corner is an example of this kind of impact on the community.
What is a negative externalality?