Government and Economic Study Guide

1. Define unitary

Power flows from one strong central authority to several weak regional authorities.

2. Define confederation

Independent states/countries band together for some common purpose.

They only delegate a few powers to the weak central authority.

States/countries retain considerable independence.

3. Define federal

Power is divided/shared between one central and several regional authorities.

4. Define Autocracy

government ruled by one person who makes all the decisions

Example: dictatorship, absolute monarchy

citizens have no say in the government

5. Define Oligarchy

Government ruled by a few people

Those few make all the decisions

General citizens have no say in the government

6. Define democracy

government ruled by the people

The general citizens have decision making power by voting

7. What are the types of governments and economic systems of the UK, Germany, and Russia?

UK parliamentary democracy constitutional monarchy Mixed Economy

Germany federal republic Mixed Economy

Russia Federation Mixed Economy

8. Why did so many countries in the EU adopt the Euro?

There are so many countries in Europe located so closely together that it makes it a lot easier to trade with the same money

9. What is the main purpose of the European Union?

(1) economic protection, (2) trade

10. What are the 3 basic questions that all economic systems have to answer?

What to produce? How to produce it? For whom to produce?

11. What is a traditional economy?

An economy where the product is shared by the whole community and based on customs

12. What is a pure free market economy?

Where individuals make decisions regarding the economy

13. What is a pure command economy?

Where the government makes decisions regarding the economy

14. What type of economic system do all European countries have?

Mixed economy

15. Give an example of a country today with mostly a command economy.

North Korea Cuba

16. Which type of economy did East Germany and the former SU used to have?

Command

PureMarket

PureCommand

Russia52%

Germany73%

United Kingdom75%

17. Where are Russia, Germany, and the UK located on the economic continuum?

18. Define Gross Domestic Product

The total amount of goods and services produced in a country in a year.

19. List 4 factors that affect a country’s GDP

human capital capital goods natural

resources entrepreneurs

20. Define human capital

The value that people bring to the marketplace

Human labor

21. Name two things that influence human capital

education/training health of employees

22. Give two examples of capital goods

machines like ovens, sewing machines, computers, etc…

23. Define entrepreneur

a person who is willing to take a risk to create a business to sell a new technique, idea, or product

24. Explain how natural resources affect a country’s wealth.

Many natural resources usually means more wealth, especially if a country has a lot of petroleum (oil)

25. Give one example of a trade barrier in Europe

Tariffs Embargo Quota the Alps for

Switzerland some countries

don’t use the Euro

some countries may be landlocked

26. Define tariff

Taxes on imports

27. Define embargo

A ban on trade with a country for political reasons

28. Define quota

A limit on the amount of a specific good that is imported

29. What is meant by “currency exchange rate”?

The ratio between two different currencies

30. What is one reason why it is more expensive to have exchange currencies from one country to another country?

Banks charge a currency exchange fee

31. If Scandinavia has a high literacy rate, what does that mean about its development?

High standard of living

It will have many college graduates who are doctors, lawyers, architects, engineers, etc…it will be well developed