A political ideology that tends to favor defense spending and school prayer and to disapprove of social programs, abortion, affirmative action, and a large, active government, Conservatives are generally affiliated with the Republican party.
Those who argue that government can effectively control the performance of an economy only by controlling the supply of money-Keynesian
Radical Left/Marxist Economics
.A political ideology that believes that capitalism is doomed to fail and that the economy should be governed by the public sector and regulated (socialism)
A combination of the Keynesian theory and the Monetarist theory, which says that both fiscal and monetary policies are needed to drive the economy
Supply Side Economics
An economic philosophy that holds the sharply cutting taxes will increase the incentive people have to work, save, and invest. Greater investments will lead to more jobs, a more productive economy, and more tax revenues for the government-Reaganomics (trickle-down)
Theory based on the principles of John Maynard Keynes, stating that government spending should increase during business slumps and be curbed during booms.
Highly pragmatic individuals, they take most things in life at face value.
a term that suggests that competitive capitalism had been replaced by large corporations that control the market in specific sectors-Lenin
Seller as price taker
Companies that can affect prices
Seller as price setter
Companies that cannot affect prices and must rely on the market
the wealthy stratum of the middle class will rule the economy
Shows the flaws in Capitalism. Goes against and questions the common rules.
Reserve army of the unemployed
unemployed people who want to work. their presence tends to depress the wages of workers and keeps those workers from making demands on employers for fear of being replaced.
Principle of private property
The private sector gets to retain its property and not for the state
Principle of the profit motive
The profit motive is an economic concept which posits that the ultimate goal of a business is to make money. Stated differently, the reason for a business's existence is to turn a profit.
Policy response to profit motive
policy that has companies that lobby for policy that feeds their profit
Labor Surplus value
worth of product = amount of labor put into it. Capitalist alienates worker.
A relationship between the tax rates and tax revenue that illustrates that high tax rates could lead to lower tax revenues is economic activity is severely discouraged.
Social Security System
System established by the 1935 Social Security Act to provide financial security, in the form of regular payments, to people who cannot support themselves
Capitalism is inherently flawed
Progressive Income tax
a tax that takes a larger percentage of higher incomes than lower incomes
national value added tax
A national sales tax instead of corporate income tax or the personal income tax.
State's rights with decentralized government
A each state can dictate what right's it will afford its people and what laws it will follow
The best interests of the overall community; the national good, rather than the narrow interests of a particular group.
an interest group that seeks to protect or advance the material interests of its members rather than society at large
the quantity of goods and services that can be produced by one worker or by one hour of work
Output per unit of capital
Capital surplus value
refers roughly to the new value created by workers that is in excess of their own labor-cost and which is therefore available to be appropriated by the capitalist, according to Marx; it allows then for profit and in so doing is the basis of capital accumulation
Phases of the business cycle
Prosperity -Expansion or Boom or Upswing of economy. Recession -from prosperity to recession(up turning point). Depression Phase : Contraction or Downswing of economy. Recovery-from depression to prosperity (low turning Point).
3Ds of the business cycle depth, duration, dispersion
Duration - how long will the cycle last Depth - the severity of the cycle dispersion - percentage of industries affected
Influence of Adam Smith
free market-natural forces of supply and demand, people should be able to operate and regulate business
Influence of karl marx
questioning the dominant economic, political, social, and religious beliefs
Influence of John Maynard Keynes
An economy will naturally restore itself to full employment after a period of downturn. -savings and investment are determined independently of each other -- savings rates being determined by a society's propensity to consume and investment by an expected rate of return relative to interest rates. He also believed that a nation's income is the aggregate of its consumption and investment
Religion is the opiate of the masses
Marx felt the purpose of religion was to keep people focused on after life than working conditions, inequality of capitalism, etc. Official religion of Communism is Atheism.
ROW and the Balance of payments
The input and output of foreign currency of a country against the rest of the world(ROW)
Foreign Direct Investment
Investment made by a foreign company in the economy of another country.
Foreign Portfolio Investment
an investment that is financed with foreign money but operated by domestic residents
Ideological basis of privatization
To keep the private sector's economy private
Interest elasticity of investment
The responsiveness of demand to a change in interest rates. This is relevant in discussing the effects of changes in monetary policy.
First 10 amendments of the constitution
Bill of Rights
Federal Reserve Act of 1913
This act created a central banking system, consisting of twelve regional banks governed by the Federal Reserve Board. It was an attempt to provide the United States with a sound yet flexible currency. The Board it created still plays a vital role in the American economy today.
A monetary system in which paper money and coins are equal to the value of a certain amount of gold
Role of government in a free society
Protect private property-- encourages investment. Provide public goods that the profit motive will not encourage--roads, bridges, education etc. Enforce the rules, protect money.
The economic problem from the conservative view
inequality between the rich and the poor
The economic problem from the liberal view
Higher deficits from government spending
Relevance of source
how well the source can relate to the topic
Reliability of source
domain name, purpose of the message?, how recent?, author's credentials? Avoid using only one source.
fairness and accuracy in reporting
defines its mission as working to "invigorate the First Amendment by advocating for greater diversity in the press and by scrutinizing media practices that marginalize public interest, minority and dissenting viewpoints."
The 1791 report on the banks
Hamilton's reports outlined the strategies that were part of a comprehensive Federalist economic and financial program. The Bank would not only stimulate the economy but also enhance the shaky credit of the government.
The declaration of Independence
An act of the Second Continental Congress, adopted on July 4, 1776, which declared that the Thirteen Colonies in North America were "Free and Independent States" and that "all political connection between them and the State of Great Britain, is and ought to be totally dissolved."
The second national bank of 1813
This institution was founded in 1816 by the Madison administration proving the evolution of the Democratic-Republcans in 25 years and their acceptance of Hamiltonian economics. This one would be established and operate exactly like the first. Calhoun introduced the bill and Clay supported it. Webster opposed it as it moved the banking center from Boston to Philadelphia
Macroeconomics is focused on the movement and trends in the economy as a whole, while in microeconomics the focus is placed on factors that affect the decisions made by firms and individuals. (Big Picture)
Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how individual businesses decide how much of something to produce and how much to charge for it. (small picture)
short run perspective
the price is fixed as to changes in aggregate demand
long run perspective
the long run is the period in which the price level for the economy is completely flexible as to shifts in aggregate demand and aggregate supply.
A term given to the philosophy of John Locke and other 17th and 18th century advocates of the protection of individual rights and liberties by limiting government power.
economic theories that are considered outside of "mainstream economics"
Persons on the extreme right side of the political spectrum. The radical right includes reactionaries(who would like to return to the values and social systems of some previous era) and libertarians(who believe in no regulation of the economy or individual behavior)
human freedom is a great good and the public sector tends to screw things up. The first belief is based more on faith than empirical result; the second derives from millennia of human experience. The increased appeal of libertarianism today reflects a nonpartisan view that the public sector has been deeply problematic under either party.
Thesis of the Incredible Bread machine
Capitalism leads to price gouging, monopolies. Supply should be regulated for the good of the people
Thesis of "Controlling Interest"
1723- 1790; Scottish; "Wealth of Nations"; first economist; "laissez-faire capitalism"; not completely against govt regulation; pro free trade; let individuals pursue own interest; attacks mercantilism- peep do thinks out of self interest (baker); prices should be fluctuated on just supply & demand- not what gov't say it is; philosophe; not hard-core conservative (gov't does have part); didn't trust businessmen; economics should have an economic (not military) end goal; skilled workforce and strong infrastructure determines power of country- not how much stacks of gold you have; colonization is dumb
(1818-1883) Scientific socialist who coauthored "The Communist Manifesto". Believed that the history of class conflict is best understood through the dialectal process of thesis, antithesis, and synthesis. Contended that a class struggle between the bourgeoisie and the proletariat would lead "to the dictatorship of the proletariat" which in turn would be a transitional phase leading to a classless society.
John Maynard Keynes
British economist who argued that for a nation to recovery fully from a depression, the govt had to spend money to encourage investment and consumption
Franklin Delano Roosevelt (FDR)
Democratic president who created the New Deal to counter the effects of the Great Depression
26th President of the United States, 26th president, known for: conservationism, trust-busting, Hepburn Act, safe food regulations, "Square Deal," Panama Canal, Great White Fleet, Nobel Peace Prize for negotiation of peace in Russo-Japanese War
Republican Presidential Nomine, Governor of Massachusetts, Republican, USA
Texas Representative, ran for president under libertarian platform, son is Rand Paul
2008; Democrat; first African American president of the US, health care bill; Gulf of Mexico oil spill disaster; economy: huge stimulus package to combat the great recession, is removing troops from Iraq, strengthened numbers in Afghanistan; repeal of Don't Ask Don't Tell; New Start treaty with Russia
William Jefferson Clinton
1993-2001, youngest to be reeelected, Democrat ever since FDR, universal healthcare, higher taxes on wealthy, cut federal budget deficit, freedom choice of abortion = success
1980 and 1984; Republican; "Reagan Revolution": reduce reliance on government; Reagonomics: supply-side, laissez-faire, send troops to Grenada, escalated the Cold War: "rollback" of communism, Strategic Defense Initiative (Star Wars); War on Drugs, Iran-Contra affair, second term-ended cold war ("tear down this wall" (Berlin Wall))
Name of the economist who argued that lower tax rates would lead to greater government revenue
who believed that modern capitalism is faced with a realization crisis because it produces faster than it can sell (economic surplus)
The Gilded era
Written in 1873 by Mark Twain and Charles Warner which explores political and economic corruption in the USA. Despite its appearance of wealth and prosperity it is riddled with corruption
The progressive era
(~1900 to ~1920) the US became more urbanized and industrialized and experienced new problems caused by rapid social, economic, and cultural changes.
The new deal
1933-1937 Government sponsored programs implemented by President Franklin D. Roosevelt to revitalize the economy and alleviate poverty and despair caused by the Depression.
The great society
A plan which included: the Civil Rights Act of 1964, the Voting Rights Act of 1965, Medicare, Medicaid, the War on Poverty, and programs offering federal aid for education. President Johnson
The new beginnings
Monetary Reform act of 1980
The first banking reform act of Congress Deregulated banks and banking interest rates Raised the amount of money the FDIC insured accounts Required banks to make regular reports to the Federal Reserve Bank concerning its deposits.