Political Economy Vocabulary

actual relationship between political and economic institutions

a system of private property and free markets

commonly: roads, national defense, health care, and primary education

Japan can produces CDs at less of a cost than South Africa

may create parastatals to create and control businesses

dropping price of goods make it difficult for companies to make a profit

exp. - only 20% of steel used in manufacturing may come from foreign countries

The total value of goods and services produced by a country in a year

how the relationship of politics and economy shapes the balance between freedom and equality

exp. - before passing a new law after meeting with trade unions and business associations

exp. - I own a car

taxes on imported goods

The economy should do as it wishes without government interference

exp. - restricts the amount of CO2 factories may release into the atmosphere

increase in price when demand outstrips supply

Responsible for controlling the national interest rate

interaction between the forces of supply and demand

inflation higher than 50 percent for more than two months in a row