Trade
This is said to take place between countries when there are no barriers to trade put in place by governments or international organizations.
What is free trade?
the ability to produce a good using fewer inputs than another producer
What is absolute advantage?
Political economist. Often recognized as the father of communism. Analysis of history led to his belief that communism would replace capitalism as it replaced feudalism. Believed in a classless society.
Who is Karl Marx?
an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets
What is a free market economy?
argues that the economic value of a good or service is determined by the total amount of labor required to produce it
What is labor theory?
bring (goods or services) into a country from abroad for sale
What is an import?
the ability to produce a good at a lower opportunity cost than another producer
What is comparative advantage?
a form of demand-side economics that encourages government action to increase or decrease demand and output
What is Keynesian Economics?
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.
What is a traditional economy?
an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the government
What is capitalism?
A good or service produced in the home country and sold in another country.
What is an export
If Columbia can produce milk in 4 worker hours and Hungary can produce milk in 8 worker hours.
Who has the absolute advantage?
Columbia
Famous for his advocacy of monetarism
Who is Milton Friedman?
North Korea has followed the USSR ideas of how to run a government.
–What type of economy does North Korea use?
Command Economy
a general increase in prices and fall in the purchasing value of money.
What is inflation?
the development of skills in a specific kind of work
What is specialization?
Saturn and Mars can produce moon rocks and rovers.
Saturn produces moon rocks in 2 hours and rovers in 6
Mars produces moon rocks in 4 hours and rovers 7.
Who produces the rovers?
Mars
Economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation
Who is John Maynard Keynes?
An economic system in which the government controls a country's economy.
What is a command economy?
the belief that the money supply is the most important factor in macroeconomic performance
What is Monetarism?
Person who had the theory of comparative advantage
Who is David Ricardo?
Scottish economist who wrote the Wealth of Nations a precursor to modern Capitalism. Father of Economics
Who is Adam Smith?
An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.
What is a mixed economy?
A tax on imported goods
What is a tariff?