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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
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An economy where the freedom for private powers exist at the expense of public power, or government
Market
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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
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An economy unable to overcome the power of elites
Command
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Two terms describing how much a country makes in a year
- Gross Domestic Product
- Gross National Product
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____ is a function of supply and demand in any open market.
Price
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What are Americans better at in terms of production?
- rapid innovation
- mass production
- compete in price
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What are Europeans better at in terms of production?
- better at fine tuning high quality
- niche products
- compete in quality
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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
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Lots of Capital and Little Labor (semiconductors)
Capital Abundant
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Lot of Labor and Little Capital (Apparel)
Labor Abundant
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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
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Countries abundant in labor....
have a comparitive advantage in labor intensive goods (and vice versa)
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