ECO12_3

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crazysparks
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251022
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ECO12_3
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2013-12-05 14:42:33
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ECO
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PRELIMS - ECO12_3 (Mr. Battung)
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  1. -this theory was developed by Milton Friedman in the 1950s, who called it the permanent income theory of consumption, and by Franco Modigliani, who called it the life cycle theory of consumption
    CONSUMPTION (THEORY OF CONSUMPTION)
  2. Transformations of the World Economy
    • Agricultural Revolution
    • Industrial Revolution
    • Post-Fordism
    • Information Revolution
  3. -production process starts to evolve around the division of labour as the size of the production increases
    AGRICULTURAL REVOLUTION
  4. -development of industries in Europe and North America with new creations of energy
    INDUSTRIAL REVOLUTION
  5. -new shifts in production with more flexibility (just in time), new working schedules, added value goods, international division of labour and market segmentation
    POST-FORDIUM
  6. -introduces to notions such as the creativity rather than the production of goods, literally skills in order to increase communication and profits to a certain extend.
    INFORMATION REVOLUTION
  7. -economic system in which resources and the means of producing goods are privately owned.
    CAPITALISM
  8. Three Features of Capitalism
    • Private Ownership of Property
    • Pursuit of Personal Profits
    • Free Competition, Consumer Sovereignty and Markets
  9. -dominated by consumers who pick up goods and services within the best quality value
    MARKET CAPITALISM
  10. -economic political system in which all members of the society are all equal
    COMMUNISM
  11. -economic and political system that combines significant government control with free elections
    DEMOCRATIC SOCIALISM
  12. -economic and political system in which companies are privately owned but cooperate closely with the government
    STATE CAPITALISM
  13. Three Features of State Capitalism
    • Government owns the most important sectors for the good of people.
    • Various regulations from the government.
    • Taxation is a tool in order to share the benefits of production.
  14. -economic activity spanning many nations of the world with little regard for national borders.
    GLOBAL ECONOMY
  15. Consequences of Global Economy
    • Global division of labour by region of the world.
    • Increasing number of low paid workers in the poorer countries in the world.
    • Small number of business control of the world's economic activity.
  16. -system of political beliefs based on free markets and individualism
    THATCHERISM
  17. -created by Margaret Thatcher in which there must be a system to renew the role of the government in the economy
    THATCHERISM
  18. Two Concepts of Thatcherism
    • Privitizing all nationalized industries.
    • Introduce internal market within the welfare of the state for schools and health care.
  19. The Changing Nature of Work
    • Rise of Unemployment
    • Rising number of hours work per week
    • Labour force participation regarding age
  20. From Agricultural Work to Service Work
    • Farming to Corporate Business
    • Industrialized Society
    • Teleworking
    • Knowledge Society
    • European Middle Class Society
  21. Dual Labor Market
    • Primary Labour Market
    • Secondary Labour Market
    • Concept of Alienation by Marx
  22. Gender Issues at Work
    • Increasing number of women in work
    • Occupational gender segregation
    • Domestic labour
    • Feminisation of agricultural works
  23. -sum of financial wealth and housing wealth
    NONHUMAN HEALTH
  24. -present value of expected after-tax labor income
    HUMAN HEALTH
  25. -sum of human health and nonhuman health
    TOTAL WEALTH
  26. -total wealth รท expected remaining life
    CONSTANT LEVEL OF CONSUMPTION
  27. Shifts in the Consumption Function
    • Wealth
    • Consumer and saving habits
    • Size of the population
    • Income distribution
    • Credit availability
    • Expectations of change in prices
    • Expectations of future income
    • Interest rates
  28. Determinants of family income
    • Educated attainment of the head of the family and its members
    • Household savings
  29. -there is a relationship between the amount of income and proportionate change in consumption expenditures as income level shifts
    ENGEL'S LAW (ERNST ENGEL)
  30. Types of Investment
    • Gross Investment
    • Investment (flow variable)
    • Capital (stock variable)
  31. = Net Investment + Depreciation
    GROSS INVESTMENT
  32. =durable equipment, new buildings, increase in inventories
    INVESTMENT (FLOW VARIABLE)
  33. =equal to the amount of accumulated investment as of a given point in time
    CAPITAL (STOCK VARIABLE)
  34. Determinants of Investment
    • Business investment in durable equipment
    • Inventory Investment
    • Residential construction
  35. -refers to the expected present discounted value of profits
    PROFITABILITY
  36. -refers to current profit, or the net flow of cash the firm is receiving
    CASH FLOW

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