Econ #3 and #4

  1. What conditions created a feudal system in Europe? 
    • Old system collapsed and was replaced by feudalism (fall of roman empire)
    • Lords provided serfs with protection and leadership in exchange for serfs’ military service
  2. Over time, what market factors encouraged new businesses and labor mobility?
    • Improved agricultural techniques
    • Creation of merchant/trader occupations
    • Growth of towns
    • Creation of markets for selling/buying of products
    • Labor became for free and mobile
    • Creativity --> improved agriculture --> food surplus
    • Food surplus --> people leaving agriculture for new jobs --> creation of towns
  3. Changes in religious attitudes towards business.
    • Change because people saw the benefits that merchants brought to theircommunities
    • They brought new products and new knowledge 
  4. How did the Muslims and Chinese help Western growth? 
    Through technology
  5. How was Europe's growth helped by science?
    • Systematic exploration of the new world
    • Tech improvements changed economy
    • Chinese tech included gun powder and printing
    • Steam engines
  6. How were stronger national governments good and bad for capitalism
    • Nations competed with each other to build up their local economies and expand overseas
    • Trade was still difficult because every community had its own regulations/money
    • Good result was stronger national gov with standardized regulations and money
  7. What was a "guild"? 
    • Guilds were organizations of craftsmen
    • Set up quality standards for products and appropriate prices
    • Early version of labor unions
    • Resisted the introduction of mass production technology
  8. Who was Adam Smith and what did he teach? 
    • Father of modern economics
    • Wrote “The Wealth of Nations”
    • Attacked foundations of mercantilism
  9. What are social market capitalism’s features? 
    • Strong protection for workers
    • Strong safety net
    • Gov’t support for national and European companies vs. foreign ones
  10. Good and bad results of social market capitalism?
    • High standard of living 
    • Many strong European companies
    • European and foreign companies are leaving Europe
    • Unemployment has become very high
    • Social generosity is no longer as affordable
  11. What’s the worst/most harmful type of European unemployment?
    • Frictional- people in between jobs or looking for first job
    • Cyclical- short term unemployment caused by low demand in economy (recession)
    • Structural- caused by mismatch between job seeker skills and employer needs
  12. Arguments for the euro
    • Greater/easier competition- easy to make price comparisons
    • More efficiency- companies need to become fore efficient to compete
    • Created larger European financial market- lower interest rates
    • Further step towards political union
  13. Arguments against the euro
    • Loss of sovereignty- countries no longer control their own monetary policy
    • If you use euro, your country has to help in euro crises
Card Set
Econ #3 and #4
Econ #3 and #4