Different Economic Perspectives Quiz

Economic Systems

• Subsistence economy: production is for personal consumption
• Traditional economics: emphasizes utility, profit maximization, and market efficiency
• Neoclassical economics: deals with advanced capitalist world of perfect markets
• Political economy: merges economic analysis with practical politics
• Development economics: studies how economies are transformed

Globalization and Social Systems

• Globalization: increasing integration of national economies
• Social system: organizational and institutional structure of a society
• Interdependent relationship of economic and non-economic factors
• Values: principles, standards, or qualities
• Attitudes: states of mind or feelings of an individual
• Institutions: norms, rules of conduct, and accepted ways of doing things
• Economic institutions: humanly devised constraints that shape interactions in an economy

Measurements and Indices

• Income per capita: total gross national income divided by total population
• Gross national income (GNI): total domestic and foreign output claimed by residents of a country
• Gross domestic product (GDP): total final output produced by a country's economy within its territory
• Functionings: what people do or can do
• Capabilities: freedoms that people have
• Sustenance: basic goods and services
• Self-esteem: feeling of worthiness society enjoys
• Freedom: society has a variety of alternatives to satisfy wants

Development and Poverty

• Millennium development goals: set of eight goals adopted to eradicate extreme poverty
• Sector: subset of an economy
• World Bank: international financial institution providing development funds
• Low-income countries: countries with GNI per capita of less than $1,025
• Middle-income countries: countries with GNI per capita between $1,025 and $12,475
• Newly industrializing countries: countries with close links to international trade, finance, and investment
• Least developed countries: countries with low income, low human capital, and high economic vulnerability

Production and Human Capital

• Human capital: productive investment in people
• Value added: portion of a product's final value added at each stage of production
• Depreciation: wearing out of physical productive equipment reflected in write-offs
• Capital stock: total physical goods at a particular time for use in production
• Purchasing power parity: calculation of GNI using common international prices

Human Development and Demographics

• Human development index: measures national socioeconomic development
• Diminishing marginal utility: subjective value of additional consumption lessens as total consumption becomes higher
• Crude birth rate: number of children born alive each year per 1,000 population
• Dependency burden: proportion of total population aged 0 to 15 and 65+
• Fractionalization: significant ethnic, linguistic, and other social divisions within a country

Markets and Trade

• Imperfect market: market in which perfect competition is violated
• Incomplete information: absence of information producers and consumers need to make efficient decisions
• Property rights: acknowledged right to use and benefit from tangible or intangible entities
• Free trade: goods can be imported and exported without any barriers
• Terms of trade: ratio of average export price to average import price

Research and Development

• Research and development: scientific investigation to improve the existing quality of human life
• Divergence: tendency for per capita income to grow faster in higher-income countries than lower-income countries
• Convergence: tendency for per capita income to grow faster in lower-income countries than in higher-income countries
• Brain drain: emigration of highly skilled workers from one country to another