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Solutions for Chapter 2: Comparing Economic Systems

Full solutions for Explorations in Economics | 1st Edition

ISBN: 9780716701071

Solutions for Chapter 2: Comparing Economic Systems

Since 10 problems in chapter 2: Comparing Economic Systems have been answered, more than 2137 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Explorations in Economics, edition: 1. This expansive textbook survival guide covers the following chapters and their solutions. Chapter 2: Comparing Economic Systems includes 10 full step-by-step solutions. Explorations in Economics was written by and is associated to the ISBN: 9780716701071.

Key Business Terms and definitions covered in this textbook
  • ability-to-pay principle

    the idea that taxes should be levied on a person according to how well that person can shoulder the burden

  • classical dichotomy

    the theoretical separation of nominal and real variables

  • competitive market

    a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker

  • consumption

    spending by households on goods and services, with the exception of purchases of new housing

  • demand schedule

    a table that shows the relationship between the price of a good and the quantity demanded

  • finance

    the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk

  • frictional unemployment

    unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

  • labor force

    the total number of workers, including both the employed and the unemployed

  • libertarianism

    the political philosophy according to which the government should punish crimes and enforce voluntary agreements but not redistribute income

  • macroeconomics

    the study of economy-wide phenomena, including inflation, unemployment, and economic growth

  • market economy

    an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

  • market failure

    a situation in which a market left on its own fails to allocate resources efficiently

  • median voter theorem

    a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

  • net capital outflow

    the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners

  • nominal GDP

    the production of goods and services valued at current prices

  • poverty line

    an absolute level of income set by the federal government for each family size below which a family is deemed to be in poverty

  • property rights

    the ability of an individual to own and exercise control over scarce resources

  • public goods

    goods that are neither excludable nor rival in consumption

  • public goods

    goods that are neither excludable nor rival in consumption

  • welfare economics

    the study of how the allocation of resources affects economic well-being

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