Questions and Answers
What distinguishes appropriations from entitlement programs in the legislative process?
Appropriations require approval for each allocation, while entitlements provide automatic funding.
How do tax expenditures impact government accountability?
Tax expenditures decrease government accountability by obscuring actual spending from taxpayers.
Define a bank of issue and its function in the financial system.
A bank of issue makes loans by printing currency backed by assets financed with those loans.
What role does a central bank play in relation to commercial banks?
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How is currency created by a central bank, and what happens to it when loans are redeemed?
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Explain the significance of productive versus nonproductive assets for a bank of issue.
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Why might legislators use tax breaks instead of direct appropriations?
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What are the implications of a central bank monetizing assets for economic policy?
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What is the significance of 'discounting' in relation to central banks according to the Federal Reserve Act?
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How are commercial banks defined and what role do they play in the economy?
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What distinguishes an investment bank from a commercial bank?
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In binary economics, what does the term 'barrier' refer to?
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Who developed binary economics and what does the term 'binary' signify?
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What is the main premise of binary economics regarding economic growth and abundance?
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Describe the three interrelated principles of economic justice in binary economics.
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What role does Capital Credit Corporation (CCC) play in promoting capital ownership?
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How does the Capital Credit Insurance Corporation (CCIC) support Capital Homestead participants?
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What is the importance of the 'binary property right' concept in binary economics?
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Explain the concept of 'binary productiveness' in the context of economic growth.
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In what way does binary economics differ from classical economic theory regarding the factors of production?
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What does binary theory assert about the relationship between economic justice and market efficiency?
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What is the fundamental aim of the Capital Homestead program?
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What role does the Capital Credit Reinsurance Corporation (CCRC) play in loan management?
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How does Capital Homesteading address the ownership of advanced technologies?
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What is the purpose of a Capital Homestead Account (CHA)?
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Describe the taxation benefits of the Capital Homestead Exemption.
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How did Louis Kelso define capitalism differently from traditional interpretations?
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What critique do binary economists have regarding the term 'capitalism'?
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What is the fundamental difference between 'charity' and 'justice' as described in the text?
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Why is 'charity' considered a virtue in the context provided?
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What implications does the 'Just Third Way' have for economic systems?
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In the context of the Capital Homestead Act, what does 'adequate and secure income' mean?
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How does the Capital Homestead model differ from traditional concepts of capitalism?
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What is meant by 'insurers of last resort' in the context of the CCRC?
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How does the idea of 'future savings' relate to investment loans in Capital Homesteading?
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What concept does the Capital Homestead Act challenge in the current financial system?
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What were the origins of the Individual Stock Ownership Plan (ISOP)?
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How is imputed rent generally understood in economic terms?
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What distinguishes demand-pull inflation from cost-push inflation?
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What economic policy is defined in the Industrial Homestead Act?
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What is the main focus of the Global Justice Movement?
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How can inflation be controlled according to economic theories?
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What type of securities are created under primary issuance?
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What is the role of commercial capital credit insurance?
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What economic condition does 'interest-free credit' refer to?
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What fundamental change does the Just Third Way propose?
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Define cost-push inflation and its implications.
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What does the term 'pure credit' refer to in economic contexts?
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How do secondary securities differ from primary securities?
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What is the main limitation of shareholders or creditors claiming capital assets of a corporation?
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What do 'forced savings' imply in an economic framework?
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How can democratizing corporate accountability potentially improve a corporation's function?
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Define 'Capital Credit' in the context of financing projects.
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What distinguishes 'Consumer Credit' from other forms of credit?
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What is a major characteristic of 'Non-Recourse Credit'?
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Explain the concept of 'Pure Credit'.
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How does 'Self-Liquidating Credit' function?
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What is the role of 'Credit, Interest-Free' in relation to productive purposes?
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In the context of capital homesteading, what does 'pure credit' facilitate?
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What is meant by the term 'Two-Tiered Credit System'?
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How does 'credit insurance' relate to non-recourse loans?
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What are the expected outcomes of the profits generated under 'pure credit' financing?
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Identify one advantage of using capital credit for individuals lacking savings.
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What constitutes the basis for 'pure credit' in financing?
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What distinguishes 'good' uses of money from 'bad' uses in Capital Homesteading?
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How does the Fed's discount window function under Capital Homesteading?
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What is the primary purpose of the Customer Stock Ownership Plan (CSOP)?
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What is the implication of deflation in an economy?
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Define demand in economic terms.
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How are demand deposits defined in banking?
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What constitutes aggregate demand?
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What is economic dilution and how does it affect shareholders?
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Differentiate between economic dilution and political dilution.
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What role does the discount rate play in monetary policy?
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Explain the process of discounting by a central bank.
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What is the intended effect of backing currency with productive assets?
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How does effective demand relate to Keynesian economic theory?
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What are the implications of issuing new shares on current shareholders?
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What is the relationship between derived demand and effective consumer demand?
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What fundamental economic principle does the 'Just Third Way' identify as essential for political democracy?
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How does the 'Just Third Way' differ from the approaches of Bill Clinton and Tony Blair regarding economic globalization?
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What does Moses Maimonides identify as the highest form of charity?
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What is the moral virtue that commutative justice emphasizes?
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How does social charity differ from organized charity?
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According to Aristotle, what does distributive justice involve?
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What principle serves as the moral basis for each of the economic justices mentioned?
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What was the main proposal of the Chicago Plan from the 1930s?
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What does participative justice guarantee for individuals in society?
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What is the Citizens Land Bank (CLB) designed to do?
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Define collateral in the context of loans.
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How does economic justice relate to social justice?
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What does 'collective' refer to in the context of group activities?
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What is the ultimate purpose of economic justice according to the content provided?
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How does collectivism differ from joint ownership?
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What does the principle of limitation (feedback principle) in social justice aim to address?
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Explain the common good according to the context provided.
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In the context of the 'Just Third Way,' how is economic harmony achieved?
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What vices are highlighted as detrimental to a moral and just society in the 'Just Third Way'?
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According to Rev. William Ferree, how does the common good relate to individuals?
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What does the term 'economic institutions' encompass in the context of economic justice?
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What characterizes a corporation as a legal entity?
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What is the key distinction between distributive justice and charity, according to the content?
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What is meant by consumption income?
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What role does social charity play in social justice according to the content?
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Differentiate between Community Investment Corporations and Community Development Corporations.
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What is the significance of a full asset backing in banking?
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How does participative justice define an individual's entitlement in an economic system?
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What are the key principles encompassed within Justice-Based Leadership?
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What critical aspect does social justice address within an economic framework?
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What is the formula for measuring value to the customer according to Justice-Based Management?
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What is the primary role of Justice-Based Management in an organization?
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How does technological advancement challenge the principle of participative justice?
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What personal responsibility does social justice impose on members of society?
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Define the 'input principle' in relation to economic justice as outlined in the context.
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What does 'empowerment of others' signify in the context of Justice-Based Leadership?
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What is the significance of 'charisma' in transformational leadership as described in the Justice-Based Leadership?
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How does binary economics view the term 'human capital'?
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In Justice-Based Management, how is success measured within a productive enterprise?
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What is the critical relationship between economic justice and capital ownership in the context of participative justice?
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What role do organized acts of social justice play within defective institutions?
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How does social justice function at different levels within society according to the provided content?
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What is the primary function of money in commerce?
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How does Capital Homesteading redefine the creation of new money?
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What distinguishes 'money, old' from 'money, new'?
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What role does the Open Market Committee play in the U.S. economy?
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How does Milton Friedman's Negative Income Tax propose to support income?
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What does 'discounting' refer to in the context of loans?
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In binary economics, what does Louis Kelso mean by money being a 'yardstick'?
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How does the discount rate function within the Federal Reserve System?
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What implications does characterizing money as a 'social good' have for its use?
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What is the primary goal of distributism as proposed by G. K. Chesterton and Hilaire Belloc?
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What is the significance of defining a 'person' in economic terms?
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Describe the relationship between capital credit and future savings in Capital Homesteading.
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What legislative requirement must dividends meet under current U.S. law?
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What does 'paper, industrial' refer to in financial terminology?
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What distinguishes an Employee Stock Accumulation Plan (ESAP) from an Employee Stock Ownership Plan (ESOP)?
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How is the concept of 'personalism' relevant to economic discussions?
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Define 'entitlement' in the context of government funding.
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What is the impact of viewing money as part of the 'invisible sector' of the economy?
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What is the concept of 'ephemeralization' as described by R. Buckminster Fuller?
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Explain how 'non-recourse credit' functions in financial systems.
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Explain the significance of feasibility in capital projects.
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What role do financial instruments play in securing agricultural assets?
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What is the Federal Funds Rate?
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How does the concept of 'future profits' relate to the functioning of Capital Homesteading?
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What was the purpose of the Federal Reserve Act of 1913?
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What is a major function of the Federal Reserve System today?
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Describe the key difference between leveraged and unleveraged ESOPs.
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What does 'distributive justice' address in economic terms?
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What role do regional Federal Reserve Banks primarily play today?
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How does productivity differ from other factors of production in economic assessments?
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What constitutes profits in a business context?
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Explain the difference between average and marginal propensity to consume.
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What are the core rights associated with property ownership?
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Discuss the Quantity Theory of Money's core equation and its elements.
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What is rediscounting in the context of central banking?
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How does a 100% reserve policy function in banking?
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What is the significance of property definitions in a civilized society?
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How does the velocity of money influence economic transactions?
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What role do laws play in the effectiveness of property rights?
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In what way does the marginal propensity to consume vary among different income groups?
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How does Capital Homesteading propose to alter capital ownership?
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What is meant by the term 'pure credit' in economic discussions?
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What limitations exist for shareholders or creditors regarding capital assets of a corporation?
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What is Justice-Based Management (JBM) and how does it differ from Value-Based Management (VBM)?
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What constitutes a marketable good or service in an economic context?
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In an ESOP, what is meant by 'Voting Passthrough'?
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What are the consequences of a wage system, according to the content provided?
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How does Aristotle’s concept of 'leisure work' contribute to self-actualization?
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How does Personalism view the relationship between individual rights and the state?
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Explain the term 'Zero-Sum' and its implications in economic contexts.
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What role do moral values play in Justice-Based Management?
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In what way does Economic Personalism aim to democratize economic power?
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Define the concept of 'just wages' within the framework of Economic Personalism.
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What is the significance of a 'determinant number of people' in the context of a wage system?
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In the definition given, what does work encompass beyond economic labor?
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What role does power play in shaping an individual's ability to influence their future according to the text?
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What fundamental issues does the binary economy aim to address within society?
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How does Personalism's view of human dignity differ from that of Collectivism?
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What checks are put in place to prevent the abuse of economic power in a just society?
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How does the concept of economic justice relate to market efficiency in binary economics?
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Describe the importance of a just monetary system according to Economic Personalism.
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What are the categories of inputs recognized by Economic Personalism for contributing to income?
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Explain how the Just Third Way addresses the distribution of economic power.
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In what context does the term 'price' hold different meanings between market and centrally planned economies?
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What does the term 'privilege' imply in legal contexts?
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How does the concept of 'productiveness' relate to economic factors?
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What connection exists between property rights and power in Economic Personalism?
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How does Personalism advocate for the Common Good in individual empowerment?
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How can advancements in technology contribute to overcoming economic scarcity?
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In what way does Louis Kelso's framework address social justice issues?
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What constitutes economic sovereignty according to the text?
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Define the principle of subsidiarity and its relevance in economic governance.
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How does the concept of synergy differ from a zero-sum game in economic interactions?
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What is the significance of a tax credit in economic policy?
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Explain the role of ownership in the context of economic sovereignty.
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Describe how the binary economy proposes to increase affluence.
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What distinguishes socialism from other economic systems as defined in the text?
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How does binary economics view the necessity of private property?
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What implications does the Just Third Way hold for the current economic systems?
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What is the essence of the 'future savings' concept in Capital Homesteading?
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How does the idea of a 'two-tiered credit system' impact economic equity?
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What does 'imputed rent' signify in economic discussions?
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What is a reserve requirement and how does it affect a bank's ability to loan?
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In binary economics, what is meant by 'effective scarcity'?
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How does the concept of 'Scarcity, Post' challenge traditional economic assumptions?
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What role does a risk premium play in loan agreements under Capital Homesteading?
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Explain how new money is created under a fractional reserve system.
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What does Say's Law of Markets state about the relationship between production and consumption?
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In binary economics, what is the significance of the term 'binary property right'?
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What is the difference between 'savings, past' and 'savings, future' in binary economics?
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How does binary economics propose to address issues of income inequality?
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Define 'ephemeralization' and its relevance to binary economics.
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What role does 'forced savings' play in capital formation?
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How does the traditional view of scarcity differ from the perspective presented in binary economics?
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What is the importance of a bank's reserves in covering demand for cash on deposit?
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What is meant by 'capital credit' in the context of binary economics?
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What is legal tender?
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Define the principle of limitation in binary economics.
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What is M1 in the context of U.S. money supply?
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How does M2 differ from M1?
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What components make up M3?
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What does market glut refer to?
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Describe the primary market.
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What is the function of the secondary market?
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How does Maslow's Hierarchy of Needs relate to economic justice?
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Explain mercantilism.
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What is the relationship between the principle of limitation and private property?
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What does the term 'Eurodollars' refer to?
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What does the discontinuation of M3 by the Federal Reserve imply?
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How is the principle of harmony viewed in binary economics?
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Study Notes
Appropriation
- Legislative process allocating funds to government programs on a discretionary basis, differing from automatic entitlement funding.
- Tax breaks can obscure government spending, reducing transparency and accountability to taxpayers.
Types of Banks
- Bank: Financial institutions for deposits and loans.
- Bank of Issue: Issues loans by printing currency backed by its assets.
- Central Bank: Functions as a bank for commercial banks, involved in money creation and control of monetary policy via asset purchasing.
- Commercial Bank: Facilitates economic transactions through deposits and loans, can create money when permitted.
- Investment Bank: Acts as an intermediary in buying/selling securities.
Binary Economics
- Developed by Louis O. Kelso; divides production into human labor and capital.
- Advocates for economic growth through shared ownership of capital, rejecting scarcity as inevitable.
- Emphasizes that broad ownership of capital amongst individuals can create economic freedom and justice.
- Identifies three principles: Binary Growth, Binary Productiveness, and Binary Property Right, promoting equitable capital ownership.
Capital Instruments and Organizations
- Capital: Non-human production elements, including land, equipment, and intellectual property.
- Capital Credit Corporation (CCC): Promotes capital ownership through loan aggregation for discounts by the Federal Reserve.
- Capital Credit Insurance Corporation (CCIC): Provides credit insurance for Capital Homestead credits, safeguards lenders against defaults.
- Capital Homestead: Concept from the 19th century expanded to include ownership of advanced technologies for wealth accumulation.
- Capital Homestead Account (CHA): A tax-sheltered account for accumulating capital assets and generating income.
Economic Systems
- Capitalism: Concentrated capital ownership with a significant proportion of the population employed with little ownership.
- Advocated by Kelso as "universal capitalism," a system favoring individual ownership over labor dependence.
- Critics argue capitalism fosters class division and monopolies.
Charity and Social Responsibility
- Charity: Moral principle involving altruism without expecting returns, focused on needs.
- Social Charity: Guides individual behavior towards institutions, aimed at reforming rather than destroying.
Historical Economic Proposals
- Chicago Plan: 1930s proposal for a 100% reserve requirement in banking to prevent financial crises.
Collective Ownership and Society
- Collectivism: Denies personal ownership rights, contrasting with joint ownership models where individuals share ownership rights and profits.
- Common Good: Framework for individuals to exercise rights that promote societal justice and personal fulfillment. Advocates cooperation among institutions for social development.
Corporate Structure
- Corporation: Legal entity limiting liability for owners, facilitating financial operations while separating personal assets from corporate debts.
Consumption and Income
- Consumption Income: Expenditures on consumer goods instead of savings or investments.### Corporate Accountability and Democracy
- The industrial revolution and the Information Age have led to increased managerial abuses within corporations.
- Corporations need to enhance contributions to society by balancing market productivity with consumer purchasing power.
- Democratizing corporate accountability and improving transparency can mitigate corporate drawbacks.
- Increasing corporate dividends to a broader base, especially workers, could improve stakeholder engagement.
Economic Terms and Concepts
- Cost: Represents the total of tangible and intangible charges related to producing goods and services, typically measured in currency.
-
Credit: Refers to loans that must be repaid, usually with interest or fees.
- Capital Credit: Funds for feasible projects expected to generate income and repay loans from future earnings; enables capital ownership for those lacking savings.
- Consumer Credit: Borrowed funds to purchase non-income generating consumer goods.
- Interest-Free Credit: Loans not tied to existing savings; viewed differently across religions due to concepts of usury.
- Non-Recourse Credit: Loans secured by project assets, shielding personal assets from default risks.
- Pure Credit: Interest-free loans for productive projects based on future income-generating potential.
- Self-Liquidating Credit: Loans forecasted to be repaid from the profits generated by the assets financed.
Financial Systems and Policies
- Two-Tiered Credit System: Differentiates between beneficial uses of credit (capital ownership growth) and harmful (nonproductive debts).
- Currency: Standardized tokens of value used as money within an economy.
- Customer Stock Ownership Plan (CSOP): A model enabling regular customers of utilities to gain ownership shares based on their patronage.
Economic Dynamics
-
Demand: The desire for goods/services supported by the ability to make legal transactions.
- Aggregate Demand: Total demand calculated from consumer goods, services, investments, and net exports.
- Effective Demand: Income allocated for consumption rather than reinvestment.
-
Dilution: Two types exist:
- Economic Dilution: Reduction in company asset values due to new shares without profit increases.
- Political Dilution: Addition of shareholders without diminishing existing shareholders' economic value.
Monetary Concepts
- Discount Rate: The interest percentage central banks reduce for loans; essential for monetary policy.
- Discounting Process: Central banks create currency or demand deposits to purchase qualified loans at a discount.
- Dividends: Profit distributions to shareholders, traditionally approved by a corporation’s board of directors.
Ownership Structures
- Employee Stock Ownership Plan (ESOP): A method allowing employees to acquire ownership shares in their companies without personal financial risk.
- Capital Homesteading: A policy aimed at spreading ownership and financing for new capital via interest-free credit, backed by progressive assets.
Economic Models and Movements
- Global Justice Movement: An initiative focusing on restructuring the global economic framework to align with social and economic justice principles.
- Distributism: Advocated by figures like G.K. Chesterton, promoting small ownership of productive assets to distribute wealth more equitably.
Current Economic Challenges
- Inflation: A rise in pricing levels categorized as Demand/Pull or Cost/Push inflation.
- Deflation: A fall in price levels, often a result of reduced money supply leading to fewer units of currency available for an unchanged amount of goods and services.
Legal and Regulatory Framework
- Federal Reserve System: Established by the Federal Reserve Act of 1913; responsible for controlling inflation and ensuring stability in the U.S. dollar, primarily acting as a lender of last resort.
- Entitlement: Automatic government funding allocations, such as subsidies, differing from appropriations which need approval each time.
Understanding these economic principles and corporate structures is essential for navigating the complexities of modern financial systems and advocating for more equitable practices.### Commercial Capital Credit Insurance
- Serves as a substitute for collateral, aiding borrowers with limited savings.
- Protects lenders from risks associated with loans for purchasing corporate growth shares under Capital Homesteading.
Interest
- Represents a portion of project profits due to financing provisions, commonly viewed as a "charge for money usage."
- Accurately defined as a "service charge" or "transaction fee" when money is created using "pure credit."
Security Issuances
- Primary Issuance: Newly issued equity shares or bonds from issuers, can be government or private entities.
- Secondary Issuance: Existing equity shares or bonds sold by previous holders, typically traded on exchanges; speculative values drive prices.
- Under Capital Homesteading, speculative purchases of secondary issuances are restricted to "old money."
Just Third Way
- Proposes a free market that democratizes money and credit access for all, promoting individual ownership of income-producing capital.
- Represents a third alternative to socialism and capitalism, aiming to disperse capital ownership and prevent economic corruption.
- Advocates for the restoration and extension of private property rights to key underpin economic democracy.
Justice
- Defined as universal principles guiding moral judgments, emphasizing respect for rights and equity.
- Encompasses categories: Commutative (value exchanges), Distributive (proportionality in distribution), and Economic (foundational moral principles in economic interactions).
Justice Types
- Commutative Justice: Focuses on exact exchanges in transactions; e.g., a $5 debt needs $5 repayment.
- Distributive Justice: Assesses proportionality in distributions based on contributions, defining just wages and profits through market dynamics.
- Economic Justice: Guides the establishment of fair economic institutions that enable individual potential development.
Participative and Social Justice
- Participative Justice: Advocates for universal access to means of contribution through labor and capital; rewards based on participation.
- Social Justice: Centers on the common good, ensuring equal access to resources for all societal members and facilitating collaboration for institutional reform.
Justice-Based Leadership (JBL)
- Aligns values and actions across levels of an organization based on justice principles, integrating aspects of servant and transformational leadership.
- Aims to empower individuals within organizations, strengthening overall group effectiveness.
Justice-Based Management (JBM)
- A management framework rooted in principles of justice, aimed at creating sustainable ownership cultures and maximizing customer value.
- Measures success through customer value delivery insightfully factoring in quality and price dynamics.
Labor
- Defined in binary economics as all forms of human work contributing to economic processes rather than merely expressed through capital appreciation.
Monetary Aggregates
- M1: Includes currency, travelers checks, and demand deposits; essential for understanding liquidity in the economy.
- M2: Encompasses M1 plus savings deposits and small time deposits; indicates a broader measure of money supply.
- M3: Previously contained M2 plus large deposits and institutional funds; discontinued as a metric in 2006.
Market Dynamics
- Market Glut: Describes a condition where production exceeds market demand, impacting pricing.
- Primary Market: Transactions involve direct purchases from original issuers.
- Secondary Market: Deals with transactions of financial instruments among other parties, distinct from the original issuer.
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Description
This quiz explores the legislative process of appropriation, which involves allocating funds to government programs. Unlike entitlement programs, appropriations require approval each time, revealing the complexities of government spending habits. Test your understanding of these key concepts!