economic institutions

• What does the term "Invisible Hand" refer to?

  Self-regulating nature of the market
• How do individual actions driven by self-interest benefit society?

  They unintentionally benefit society as a whole
• What role does the state play in the market?

  Regulates and intervenes in the market
• What is the aim of government involvement in the market?

  To balance economic activities and ensure fairness
• What are price ceilings?

  Maximum prices set by the government
• Who determines prices in specific sectors?

  Regulatory bodies like the Energy Regulatory Board
• How is labor treated in economic terms?

  As a producer good (input to production)
• What do minimum wage laws aim to protect?

  Workers from exploitation
• What does Keynesian Economics advocate?

  Government intervention during crises
• What is one method of monetary policy?

  Lowering interest rates to encourage investments
• What is an example of fiscal policy?

  Increasing public spending to spur economic activity
• What does a free market assume?

  Economies move to an optimal level without intervention
• What is market failure?

  When the market doesn't provide for certain needs
• What happens in a command economy?

  The government controls production and distribution
• What is the focus of a command economy?

  Collective welfare, such as food security
• What may happen to industries in a command economy?

  They may operate at a loss to meet needs
• What is income inequality?

  Unequal access to resources and income
• How does the government address income inequality?

  Uses taxes to redistribute income
• What are transfer payments?

  Payments like social security and unemployment benefits
• What are government purchases?

  Expenditures that contribute to output
• How do transfer payments differ from government purchases?

  Transfer payments involve no goods or services exchanged
• What is a repeated concept in Keynesian Economics?

  Advocates government intervention during crises
• What is the purpose of lowering interest rates in Keynesian Economics?

  To encourage investments
• What does increasing public spending aim to achieve in Keynesian Economics?

  To spur economic activity