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Related Flashcards
Cards In This Set
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Revenue
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Money taken in by the government through taxes, custom duties etc.
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Expenditures
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Money spent by the government
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Budget
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Government's spending plan
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Balanced budget
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Expenditures and revenues are equal (before the depression government always balanced the budget except at wartime)
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Deficit
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Expenditures are larger than its revenue - the difference is the deficit
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Laissez faire
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"let do" no interference by the government in the economy
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What was the impact of the laissez faire attitude?
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System could not be used after the war - government had to take more control over social and economic matters
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Currency
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The money used in a country
value of currency today is based on productivity of country, size of debt, interest rates and value compared to other countries |
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Capitalism
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Economic system in which private individuals and business firms carry on production and exchange of goods and services
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Market economy
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Countries that have a capitalist economic system - individual producers and consumers decide on type of goods prices etc.
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Supply
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Availability of product
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Demand
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How badly people want a product
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How does supply and demand work?
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A great supply = lower prices
great demand = higher prices |
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What is the business cycle?
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Cycles of prosperity and recession (economic activity in decline) every 5 or 6 years
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How did the understanding of the business cycle affect the reaction to the depression?
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Politicians, business leaders etc. assume a recession will correct itself but the depression couldn't
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