| Term | Definition |
|---|
| scarce | if a good is in limited quantity, is desirable, and has more than one use |
| economic question | how do i use my limited resources to satisfy my unlimited wants and needs? |
| incentive | cost or benefits that motivates a decision [ ex- money, advantages, gives a good feeling etc] |
| inferior good | [cheaper goods bought] if income falls, demand for rises |
| normal good | if income falls, demand falls |
| complementary good | a fall in the price of one good raises the demand for another good |
| substitute goods | when a fall in price of one good reduces the demand for another good |
| price | an indicator for buyers and sellers |
| opportunity cost | the second-best alternative to a purchase [not the actual money! what you could've bought instead] |
| PACED decision-making system | problem, alternatives, criteria, evaluate, decide |
| ownership of resources | drives someone to protect their property and not deplete the resources |
| law of demand | when the price of a good rises, consumers decrease their quantity demanded for the product |
| law of supply | when the price of a good rises, suppliers increase their quantity supplied of the good |
| change in quantity demanded / supplied [graph-wise] | [PRICE changes] moves from point to point on graph |
| change in demand / supply [graph-wise] | whole graph shifts |
| causes of change in demand | consumer income; demand for substitute / complementary goods; consumer taste; expectations about market; number of buyers in market |
| causes of change in supply | cost of input (labor, land, capital); change in technology; taxes / subsidies; price expectations; price of other outputs; number of sellers in market |
| equilibrium | when the quantity demanded is the same as the quantity supplied [where the two graphs intersect] |
| shortage | when the quantity demanded exceeds the quantity supplied |
| surplus | when the quantity supplied exceeds the quantity demanded |
| demand increases | eq. price: increases / eq. quantity: increases |
| demand decreases | eq. price: decreases / eq. quantity: decreases |
| supply increases | eq. price: decreases / eq. quantity: increases |
| supply decreases | eq. price: increases / eq. quantity: decreases |
| demand and supply increase | eq. price: ambiguous / eq. quantity: increases |
| demand: increases / supply: decreases | eq. price: increases / eq. quantity: ambiguous |
| Demand and supply decrease | eq. price: ambiguous / eq. quantity: decreases |
| demand: decrease / supply: increase | eq. price: decrease / eq. quantity: ambiguous |
| those hurt from unanticipated inflation | lenders, savers, those on fixed income [unanticipated inflation?] |
| those who gain from unanticipated inflation | borrowers at a fixed rate [unanticipated inflation?] |
| the unemployed | people looking for work who aren't already employed [ must be over 16 and able to work] |
| structural unemployment | unemployed due to lack of skill [ex - replaced by machines] |
| frictional unemployment | unemployed due to choice [ex - going back to school] |
| cyclical unemployment | unemployed due to the business cycle [ex- laid of b/c of recession] |
| GDP | [most important measure of economic well-being] = C + I +G +X |
| real GDP | GDP after being "deflated" [GDP - inflation] |
| nominal GDP | strictly looking at the yearly GDP |
| GDP per capita | GDP per person [better reading of health than GDP alone] |
| CPI | [(cost in year X) / (cost in base year)] X 100 |
| inflation | [(price index of most recent year) - (price index in former year)] / (price index in former year) X 100 |
| three goals of US market economy | economic growth; full-employment; price stability |
| Truman Doctrine | supported countries that rejected communism; wanted to stop the spread of communism |
| Chinese Nationalists | led by Jiang Jieshi; fought communists but end up fleeing |
| Chinese Communists | led by Mao Zedong; fought Nationalists; win and take over country |
| containment | trying to stop the spread of communism; the major justification of US's foreign policy |
| NATO [north atlantic treaty organization] | alliance between US, Canada, 10 other European nations |
| Warsaw Pact | USSR, East Germany, Czechoslovakia, Poland; established in response to NATO |
| Iron curtain | what "separated" communist eastern Europe from capitalist western European ideas and media |
| Mao Zedong | leader of communist China; won civil war; renamed country People's Republic of China |
| Reunification | the re-uniting of Germany [didn't think they would attack again]; caused the USSR to blockade West Berlin |
| Marshall Plan | program to give aid to needy countries recovering from the war |
| Strategic Defense Initiative | a program by Regan to protect against enemy missiles |
| Ayatollah Ruholla Khomeini | exiled leader who lead the religious oppositions to Western influences in Iran |
| Douglas MacArthur | US general who wanted to use the atomic bomb on Korea; ended up being fired by Truman |
| Vietcong | communist guerrillas in South Vietnam; actually very powerful |
| ways superpowers influenced third world countries | backed wars of revolution, liberation, or counterrevolution; engaged in various covert activities [ex - spying, assassinations]; gave military aid, built schools, combated poverty, and sent volunteer workers |
| brinkmanship | a country going to the brink of war without actually fighting |
| detente | realpolitik; lessening Cold War tensions; began when nuclear war seemed probable! |
| partition | the process of dividing India into two nations; separated Muslims and Hindus |
| Kashmir | small point of land disputed by India and Pakistan |
| Camp David Accords | signed by Anwar Sadat [Egypt] and Menachem Begin [Israel]; Egypt finally recognized Israel as a nation |
| Suez Crisis | Egypt took the Suez Canal in 1956; Britain briefly fought, but withdrew |
| Negritude Movement | a movement by French-speaking Africans and west Indians to celebrate African culture |
| US military bases in Philippines | 2 army bases critical to staging the Vietnam and Korean war |
| Mobutu Sese Seko | long-time dictator of Congo; renamed it Zaire |
| Mau Mau | a secret society made up of mostly of native Kenyan farmers forced out of highlands by the British |
| Aung San Suu Kyi | the democratic leader of Burma who was put under house arrest for 6 years; won Nobel Peace Prize |
| Sri Lanka | much of the violence in this country was caused by the Tamils [Hindus] who were fighting Buddhists |
| Taliban | Islamic extremists who seized control of Afghanistan |
| intifada | "uprising;" Palestinians responded to Israel's forceful repression by civil disobedience |
| Ferdinand Marcos | dictated the Philippines for many years and held absolute power |
| Singapore | this country became a city-state with a standard of living far higher than any of its neighbors |
| Algeria | former colony of France that was torn apart in the 1990s by a deadly civil war between the government and Islamic militants |
| 6 Day War | Israel won this war and aquired a "buffer zone" of land to protect from future attacks |
| Perestroika | a program by Gorbachev to attepmt to modify the economic structure of the Soviet by allowing some private enterprise |
| apartheid | complete separation of races; used in South Africa; foreign nations opposed this by banning them from the Olympics |
| four pillars of democracy | free elections: citizen participation; majority rule, minority rights; constitutional government |
| Helmut Kohl | dissmissed fears of Germany conquering again |
| Boris Yeltsin | Russian Republic's first elected president |
| ethnic cleansing | when Bosnian Serbs used violence to rid Bosnia of its Muslims |
| Falklands War | Argentina lost to Britain; prompted the generals of Argentina to step down and allow free elections |
| Four Modernizations | started by Deng Xiaoping; called for modernizations in agriculture, industry, defense, and technology |
| Hong Kong | this country was regained by China, who promised keep the same political liberties and economic system for 50 years |
| Yugoslavia | the end of communist rule on this country caused it to break apart because of ethnic conflicts |
| Poland | this country was the first to embrace the spirit of change and demand a new government |
| Tienanmen Square | student protestors gathered here, and were ruthelessly slaughtered by the government; caused the Chinese government to begin a massive campaign to stamp out protest |
| Circular Flow | A model that shows the process of exchange among consumers (also called households), businesses and government |
| Nicaragua | The Sandinistas overthrew this country's dictator and then ruled the country for many years. Today the country is a democracy. |
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