Whatever Happened to Justice Ch 10
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Questions and Answers

What primary factor contributes to economic progress according to the content?

  • Technological innovation
  • Free trade (correct)
  • Increased regulations
  • Government subsidies

Which of the following historical conditions is NOT mentioned as part of the 'beforetime'?

  • Homeownership for American families
  • Continually rising real wages
  • High unemployment rates (correct)
  • Single-parent households being rare

What sentiment do most Americans express regarding their children's future?

  • Skepticism about living standards (correct)
  • Confidence in job opportunities
  • Belief in declining poverty rates
  • Optimism about economic growth

What was a significant economic change mentioned that began around 1973?

<p>Decline in living standards (C)</p> Signup and view all the answers

Which assertion about the past is made regarding societal conditions?

<p>People commonly left their doors unlocked. (D)</p> Signup and view all the answers

What does the author imply is necessary to avoid economic decline?

<p>Continual profit reinvestment (B)</p> Signup and view all the answers

Which of the following concerns is expressed about the American dream?

<p>It is widely believed to be fading. (B)</p> Signup and view all the answers

What is the primary factor that motivates individuals to engage in trade?

<p>The desire for something more valued than what they give up (D)</p> Signup and view all the answers

According to the principles of economic calculation, how does a free trade scenario benefit both parties?

<p>Each party exchanges something they value less for something they value more (D)</p> Signup and view all the answers

Which statement best summarizes the concept of economic calculation?

<p>It is the process of evaluating potential trade value (B)</p> Signup and view all the answers

What might be a consequence of poor economic calculation during a trade?

<p>A potential loss for one or both parties (A)</p> Signup and view all the answers

Benjamin Franklin's perspective on trade emphasizes which important aspect?

<p>Exchanges increase the common stock of comforts in life (B)</p> Signup and view all the answers

Which of the following statements about economic calculation is true?

<p>It relies on the assumption of voluntary participation (B)</p> Signup and view all the answers

What does the term 'free trade' signify in the context of economic calculation?

<p>Trade without any form of governmental interference (C)</p> Signup and view all the answers

Why might economic calculation be considered difficult?

<p>Human errors can lead to misjudgments about value (B)</p> Signup and view all the answers

Flashcards

Free Trade

A situation where both parties involved in a trade value what they receive more than what they gave up, resulting in a mutually beneficial exchange.

Decline

The gradual decline or deterioration of a system or process, like a car needing repairs or food spoiling.

Productivity Growth

The ability to produce goods and services more efficiently over time, leading to economic growth and higher living standards.

Competitiveness

The ability of businesses to compete effectively in the global marketplace.

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Living Standards

A sustained increase in the purchasing power of individuals or households over time.

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Real Wages

The amount of money earned by workers, adjusted for inflation to reflect actual purchasing power.

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Recession

A period of economic downturn characterized by decreased economic activity, job losses, and lower production.

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Economic Calculation

The process by which individuals and businesses make decisions about production, consumption, and trade based on their perceived value and expected gains. It involves weighing the costs and benefits of various options, seeking to maximize their overall well-being, and judging if an exchange is worthwhile.

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Progress

The overall improvement in the well-being of a society resulting from the sum of all the profits generated through free trade. It represents progress in terms of increased abundance, better living standards, and advancement in technology and innovation.

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Risk in Economic Calculation

The fact that economic calculations are imperfect and prone to mistakes, leading to occasional losses in trade. This is due to limited information, unpredictable factors and human error in decision-making.

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Thinking in Economic Calculation

The driving force behind economic activity. Individuals and businesses act based on their beliefs about gains, weighing the costs against the potential benefits. This mental process guides choices and actions in the marketplace.

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Profits Without Advancement

Profits that do not necessarily lead to a clear improvement in overall well-being. This can occur when gains are only temporary or result in unintended consequences.

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Economic Calculation and Free Trade

The fundamental basis of economic progress, highlighted by the principle that free trade promotes mutual benefit and improvement in well-being for both parties involved.

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Two Fundamental Laws for Progress

The two fundamental laws that, according to the text, led to America's great progress. They are the principles of non-interference with others and non-encroachment on property rights. By enabling free trade and economic calculation, these laws paved the way for prosperity and advancement.

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Study Notes

Economic Calculation

  • Two fundamental laws underpinning American advancement: respecting other persons and their property, and everyone obeying them.
  • These laws created economic calculation, which is the engine of progress.
  • Economic calculation is the process of individuals assessing transactions to determine if they are mutually beneficial.
  • Free trade occurs when both parties value the exchanged items more than what they gave up.
  • All free trades, in aggregate, create societal progress.
  • Economic calculation is based on individual assessment of value, which are sometimes mistaken.
  • While some transactions yield losses, overall, voluntary transactions increase the chance of profit.
  • Not all profits translate automatically into progress, as some resources are used up in maintaining existing standards.

American Prosperity Before 1970s

  • America before the 1970s was the most advanced nation in the world.
  • Home ownership was prevalent.
  • Single-income families progressed.
  • Steady wage growth was common.
  • Normal unemployment rates were very low (3-4%).
  • Poverty was decreasing.
  • Good job opportunities were substantial.
  • Stress was less pervasive.
  • Single-parent households were rare.
  • Literacy levels in high schools were high.
  • Drug addiction was uncommon.
  • Homelessness and hunger were less visible.
  • Increased living standards were expected.

Decline in American Prosperity Since 1970s

  • Since 1973, the American economy has experienced a slow decline.
  • Productivity growth decreased.
  • Industry competitiveness dwindled.
  • Continuous rise in living standards paused.
  • Wages stagnated.
  • Most Americans indicated doubt about their children's future prosperity.
  • The American Dream is perceived as fading.

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Description

Explore the fundamental laws that have driven American advancement through economic calculation. This quiz highlights how free trade and individual assessments contribute to societal progress and examines the state of American prosperity before the 1970s.

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