Vocabulary of economics and history
And diffusion is the process of spreading of
inventions through imitating or copying.all firms try to implement the
innovations. leading widespread imitation (that’s diffusion) of inventions. In
economics technological advantage is have the invention
44. MALTHUSIAN RESTRICTION Concept thatwarns that if this growth of
poppulation is not checked, it will reach a resource limit which would result
in destruction of sectors population by famine, disease, or war. It negates high birth rates add wealth to a nation, and
advocates moral restraint (birth control by abstinence or late marriage) to
restrict the size of families.Establish psychological assumptions: 1. Food is
necessary for life2. Attraction between sexes will not disappear.And two
technological assumptions:1. Food increases in an arithmetic ratio2. Population
increases in a geometric ratio.
45.
ENCLOSURE MOVEMENT Starts In England,proceeded rapidly from 1450 to 1640;
the process complete by the end of the 19th century. In the rest of Europe(19th
century). It was a division or
consolidation of communal lands in Western Europe into the delineated and
individually owned farm plots of modern times. Before enclosure, farmland was
under the control of individual cultivators only during the growing
season;Common rights over arable land have now been largely eliminated.
46. BACKWARD AND FORWARD LINKAGES One
one side forward linkage is the relationship between a firm or industry and its
consumers where an increase in the output of the firm or industry is
transmitted forward, yielding an increase in the number of consumer s and in
the demand of outputs. In the other side backward linkage is the relationship
between a firm or industry and the suppliers of its inputs, or raw materials.
An increase in the output of the firm or industry is transmitted backward, yielding
an increase in the demand for inputs. Ex: the increase in agriculture increase
in the demand of machinery.
47. ENGEL’S
LAW An economic theory stating that as income rises, the proportion of
income spent on food falls. It suggests that consumers increase their expenditures
for food products (in % terms) less than their increases in income. After basic
food needs are met, the demand for an additional quantity of food drops off.
This is only possible due to the agricultural revolution which enabled massive
production.
48. LEWIS MODELor
dual-sector model, explains the growth of a developing economy in terms of a
labour transition between two sectors, a traditional agricultural sector(labor
supply↓,marg p>0) and a modern
industrial sector(offer supply ^ productivity↓ .
49. INTENSIVE VERSUS EXTENSIVE INCREASE OF PRODUCTION Referred to
farming and agriculture, intensive production is an agricultural production
system characterized by a low fallow ratio and the high use of inputs such as
capital, labour, or heavy use of pesticides and chemical fertilizers relative
to land area, while extensive is an
agricultural production system that uses small inputs of labour, fertilizers,
and capital, relative to the land area being farmed.
50. THE RENT OF THE LAND Established by economist David Ricardo is
the proportion of the produce of the land that is paid to the landlord for the
use of the powers of the soil. When the supply of food is greater than the
demand then the question of raising rent does not arise.But if the demand for
corn is greater than the supply of food grains then the inferior fertile land
is put into the cultivation.and the The additional cost of Labor and capital is
yielding less production than the fertile land. this depends on the growing of
the population creating more grades poorer fertile land and the raising of
rent. When the same labor and capital is put into fertile land it produces more
than the less fertile land. As the price is sold at the same price in the
market, the superior land gets surplus over the necessary cost of raising the
corn on the second grade land. This surplus is the accrues to the Land Lord. Is
the Rent of the landlord.the difference between the produce of a given quantity
of capital and labor on the more fertile land and the least fertile land is the
rent.
51.COMMERCIAL REVOLUTION: Period of European economic expansion,
colonialism, and mercantilism (16th-18th) There was a shift in the center of
trade from the Mediterranean Sea (the Hanseatic League, Italy) to the Atlantic
Ocean (England, Holland, Spain).1. Beginning with the Crusades( rediscovered
rare commodities like spices, silks) and create desire for trade,2.expanded
middle ages(15th 16 th). trough the seek of new trade routes,characterised by
new-found wealth, new economic theories,practices,and the desire for increased
world power through their colonial empires. The Commercial Revolution is marked
by an increase in general commerce, and in the growth of non-manufacturing
pursuits, such as banking, insurance, and investing.The principles of
mercantilism were adopted, and local trade barriers were abolished. Modern
credit facilities also appeared; the promissory note and the bill of exchange
were created.
52.A BILL OF EXCHANGE VERSUS A PROMISSORY NOTe A bill of exchange or draft is an unconditional order
issued by a person or firm (the drawer) which directs the receiver (the drawee)
to pay a fixed sum of money to a third party ( holder) at a future date.ex:a
cheque. While a promissory note is a written promise to repay a loan or debt
under specific terms usually at a stated time through a specified series of
payments. A banknote under the gold standard
is a case of promissory note.
DOUBLE ENTRY ACCOUNTANCY/ BOOK-KEEPING Use on present day companies.Double entry accounting
is based on the fact that every financial transaction has equal and opposite
effects in at least two different accounts. Assets = Liabilities + Equity,.
Luca Pacioli developed this method in the late 15th. He used the memorandum,
the journal, and the general ledgeraccounts for assets , liabilities, capital,
income, and expenses) . He demonstrated year-end closing entries and proposed
that a trial balance be used to prove a balanced ledger.
54. PUTTING-OUT SYSTEM It is a means of subcontracting
work.also known as the workshop system and the domestic system. In putting-out,
It is a means of subcontracting work which is contracted by a central agent who
put out materials to subcontractors who complete the work in off-site
facilities, either in their own homes or in workshops with multiple,who then
returned finished products for paymentscraftsmen. Widespread in 17th-century
Europe It undermined urban guilds and brought the first widespread industrial
employment of women and children. substituted by factories system but was until
20th century in other like china or india
55.
BANKRUPTCY legally declared inability of an individual or organizations to
pay their creditors. It can be a involuntary bankruptcy file by creditors or
initiated by the debtor “voluntary bankruptcy”.
Bankruptcy purpose.1. give another chance of starting in life to
the debtor and allows once pay most of debts and debtors to be discharged from
the legal obligation to pay most debts by submitting their non-exempt assets 2.
to repay creditors in an orderly way to the extent that the debtor has the
means available for payment.
two common
forms of bankruptcy: a reorganization bankruptcy(the business to carry on
with its daily commercial activity.can survive to insolvecy while partially
satisfying creditor claims) and a liquidation bankruptcy.( the assets are sold
off to satisfy creditor claims.
56. GOLD STANDARD monetary system in which the standard economic unit
of account is a fixed weight of gold.types:, the
gold specie standard monetary unit is associated with circulating
gold coins,the
gold exchange standard typically
does not involve the circulation of gold coins. Rather, it uses notes or coins
made of silver or other metals, but where the authorities guarantee a fixed
exchange rate with another country that is on the gold standard. This creates a
de facto gold standard, in that the value of the silver coins has a fixed
external value in terms of gold that is independent of the inherent silver
value. Finally, the
gold bullion
standardgold coins do not circulate, but in which the authorities have
agreed to sell gold bullion on demand at a fixed price in exchange for
circulating currency.
57. PARTNERSHIPS
VERSUS COMMANDITE TYPE BUSINESSES A partnership is an arrangement where
parties agree to cooperate to advance their mutual interests. Each person
contributes money, property, labor or skill, and expects to share in the
profits and losses of the business.generally used for financing maritime
trade,A commandite business is a limited partnerships, where one or more people
are general partners, and are jointly and severally responsible with all of
their estates, and one or more other persons who supply a part or the whole of
the capital, who are liable only to the extent of the capital they have
supplied(dormant or sleeping partner).
58.
LIMITED LIABILITY VERSUS JOINT STOCK COMPANY A limited liability company
(LLC) is a flexible form with elements of partnership and corporate
structurescharacterised by the limited liability to its owners. Joint-stock company is a business entity
which is owned by shareholders. This
allows for the unequal ownership of a business with some shareholders owning a
larger proportion of a company than others.they transfer their shares to others
without any effects to the continued existence of the company
. 59. LUDDISM The Luddites or machine
destroyerswere 19th-century English textile artisans who violently protested
against the machinery introduced during the Industrial Revolution that made it
possible to replace them with less-skilled, low-wage laborers, leaving them
without work. movement named after Ned Ludd,( smashed two stocking frames 30
years earlie,destroying private property and thinking of techonology as
negative for individuals and communities