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Describe the income inequality index.
- 0-equal share of country's income
- 1-most of country's wealth in hand of few
An economy where the freedom for private powers exist at the expense of public power, or government
What are some of the characteristics of a coordinated economy?
- most European countries
- less risk, more stability
- government ownership of "vital" industries
- labor unions are more common
An economy unable to overcome the power of elites
Two terms describing how much a country makes in a year
- Gross Domestic Product
- Gross National Product
____ is a function of supply and demand in any open market.
What are Americans better at in terms of production?
- rapid innovation
- mass production
- compete in price
What are Europeans better at in terms of production?
- better at fine tuning high quality
- niche products
- compete in quality
What are some characteristics of American public policy?
- High educational spending
- Low support for working families
- Private, rather than public, services
- Tax breaks, not income support
- Low taxation, low spending
Lots of Capital and Little Labor (semiconductors)
Lot of Labor and Little Capital (Apparel)
Comparitive advantage tell us that...
- Every country
- has a comparitive advantage in something
- can gain by specializing in what it does competitively well and trading for what it does less well
Countries abundant in labor....
have a comparitive advantage in labor intensive goods (and vice versa)