Test One Study Sheet

Test One Study Sheet - Macro-Economics Test #1 Capitalisma)...

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Capitalism - a) Markets b) Private ownerships c) Limited government d) Dollar votes does not equal democracy e) Self interest is important f) Lots of output, little waste g) High standard of living h) i) j) Unfair distribution of the production k) Poor mix of products l) Bad business practices Communism - a) Government creates “central plan” b) businesses have no freedom to deviate from the plan c) No private businesses, no competition between businesses d) Priority is to hit the quota e) Less self-interest f) No democracy=dictatorship by communist party to prevent selfish desire g) More economic stability (no inflation or unemployment) h) i) Less bad business practices j) Less production k) Low standard of living l) Less political freedom Problems with transitioning from Communism to Capitalism: a) Production fell a lot b) Unemployment increased c) Inflation rocketed Why? a) Managers lack basic business skills b) Massive failures in banking c) Massive corruption d) Poorly defined property rights e) Have to pay suppliers, and collect customers money to pay bills f) Government cannot collect taxes g) No safety net 3 Dimensions : a) Output= GDP (Gross Domestic Profit) b) c) Inflation GDP? Measures the market value of all final goods/services produced in the economy over a year.
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This note was uploaded on 04/07/2008 for the course ECO 201 taught by Professor Jantzen during the Spring '08 term at Iona.

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Test One Study Sheet - Macro-Economics Test #1 Capitalisma)...

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