RI #2: Economics Unit 30-1 Study Guide

Where would you put the following concepts in the chart below?
If you don’t know what a term means, find out!
individualism classical liberalism
collectivism modern liberalism
economic freedom democratic socialism
government control laissez faire
competition and self-interest are valued welfare state
equality and cooperation are favored Robert Owen
complete government (public) ownership Karl Marx
government ownership of just key industries Keynesian Economics
private property FDR and the New Deal
little government involvement supply and demand
total government involvement United States
some government involvement Sweden
market forces determine production Canada
societal needs determine production Unemployment Insurance
labour unions public health care
voting for property owners only public housing
essential services are government run private health care
Industrial Revolution Reaganomics
labour standards Thatcherism
little protection for employees or consumers supply side economics
privatization demand side economics
crown corporations neo-conservatism
left Prime Minister Trudeau’s policies
right past Premier Notley’s polices
centre President Trump’s policies
regulation Premier Kenney’s policies
deregulation Environmental protection
communism your beliefs! 
capitalism

Command Mixed Economy Free Market

Economy Economy
Key Difference between Economic Systems:
capitalism (USA) Degree of  very little
mixed economy (Canada, Sweden) government  varies
command systems (former USSR) ownership  a lot!

 governments become involved in “capitalist” economies to reduce the problems

caused by free market competition (eg. homelessness, “work fare”/ “welfare”)

Economic Questions:
How does the market economy (free market - classical liberals) answer these three
basic economic questions?

a. What should be produced?

b. How should it be produced?

c. To whom should it be distributed?

Key Events and People/Groups to Know

The Industrial Revolution

1. What were the benefits or positive effects of capitalism during this time period?

2. Who benefitted the most from this system? __________________________________

3. What were the negatives or downsides of capitalism in this time period?

4. Who suffered the most under this system? __________________________________

5. What laws did the British government eventually pass to stop these abuses?

_____________ Acts
Reactions to the Industrial Revolution

1. Who are the Luddites? What did they do? Why?

2. Who are the Chartists? What did they want? Why? Were they successful?

3. Labour Unions: how do labour unions try to correct the abuses of capitalism?

4. What did Robert Owen believe and do? What ideology did he support?

__________________________

5. What did Karl Marx believe about capitalism? What ideology did he support?

__________________________

6. What are the major differences between communism and democratic socialism?

The Great Depression

1. What event started the Great Depression? __________________________________

2. What caused this event?

3. How and why did economic problems spread or get worse?

4. What were the three goals of Roosevelt’s New Deal?

______________________ ______________________ ______________________
 5. List some specific examples of what Roosevelt did. (think: Alphabet Agencies)

6. Upon which economist’s ideas were these based? ____________________________

Business Cycle:

Label the parts on the

diagram:
 recession
 depression
 recovery
 prosperity

Use the terms below to indicate when the following are likely to occur (some occur at more
than one stage):
recession depression recovery prosperity (boom)

a. Very high unemployment _______________________

b. Increase in unemployment rates
c. Low levels of unemployment
d. high rate of inflation
e. declining values of market shares
f. declining levels of foreign investment
g. high levels of consumer spending
h. low bank lending rates
i. high levels of exporting
_______________________
_______________________
_______________________
_______________________
_______________________
_______________________
_______________________
_______________________
Graph Interpretations:
Nation I Nation II Nation III Nation IV
Inflation Rate high high high low
Unemployment Rate low high low high
Economic Growth Rate high low high low
Bank Lending Rate high high low low

1. It would be easiest to find a job in nation(s) _______________. Why?

2. The best country to borrow money in would be ____________. Why?

3. Prices would likely be lowest in _______________. Why?

4. The nation (s) “most likely” in a depression is (are) __________. Why?

5. The nation(s) “most likely” in an economic boom is (are) ____________. Why?

Modern Liberal Government Involvement

What are the three ways that modern liberal governments intervene in the market?

________________ ________________ ________________

Brainstorm examples for each of the following goals of modern liberal government
involvement in the economy.

Government involvement is going to be geared towards achieving FOUR GOALS.

Goal #1 Stabilize Goal #2 Protection Goal #3 Provide Goal #4 Provide for

the Economy of the Public Good Goods & Services the welfare of the
Citizens

To limit the duration & Laws that will protect Provide products or To ensure that citizens
effects of the economic society & consumers services that the private have at least a minimum
cycle. ‘Regulate the Boom (public) from the abuses sector will not or should standard of living or
& Bust’ or hazards of the not provide. equality of outcome.
capitalist system
Methods & Examples Methods & Examples Methods & Examples Methods & Examples
Fiscal Policy during a Recession:

Action #1: What happens with regards to government spending? _______________

How is this supposed to help? What are the effects of this action?

Action #2: What happens with regards to taxation? _______________

How is this supposed to help? What are the effects of this action?

Fiscal Policy during Boom Times:

Action #1: What happens with regards to government spending? _______________

How is this supposed to help? What are the effects of this action?

Action #2: What happens with regards to taxation? _______________

How is this supposed to help? What are the effects of this action?

Issues with Keynesian Economics:

Monetary Policy

Controlled by: _________________________________________

Action taken during a recession? ____________________________

How is this supposed to help? What are the effects of this action?

Action taken during prosperity? ____________________________

How is this supposed to help? What are the effects of this action?
Demand Side Economics
 supported by economists _______________________
 used by President _____________________________ during the ___________
______________________ and by mixed market economies post-WWII
 demand refers to controlling ________________________________

Supply Side Economics

Other names: ____

 supported by economists _________________________________ and

___________________________________________________
 used by President ______________________________ and Prime Minister
________________________________
 supply refers to __________________________________________
 main tool used is controlling _______________________________; otherwise known
as monetarism (monetary policy)

Shift in thinking caused by: Debt and Stagflation

 Are supply side economists consider left center or right wing?

 Are supply side economists in favour or against laissez-faire capitalism?

Policies:

Thatcherism (1979-90) Reaganomics (1981-89)

Canada - Alberta Advantage – Premier Klein (1990s). Now Jason Kenny (2019+)

Modern Socialism “Cradle to grave” or “womb to tomb”

Case Study: The Nordic States: ________________________________________________

 Pros? Benefits?

 Cons? Negatives?