1. Chapter 11, Economics and Politics Key Terms

2. cold war The massive military buildup that took place between 1945 and 1989 as the Soviet Union and the United States sought to contain the spread of each other’s economic and political systems. economic system An institution that coordinates human activity in the effort to produce, distribute, and consume goods and services.

3. goods Any product that is manufactured, grown, or extracted from the earth, such as food, clothing, housing, automobiles, coal, computers, and so on. services Activities performed for others that result in no tangible product, such as entertainment, transportation, financial advice, medical care, spiritual counseling, and education.

4. mechanization The addition of external sources of power, such as oil or steam, to hand tools and modes of transportation. colonization A form of domination in which one country imposes its political, economic, social, and cultural institutions on an indigenous people and the land they occupy.

5. capitalism Economic system in which raw materials and the means of producing and distributing goods and services are privately owned. private ownership A situation in which individuals own the raw materials, machines, tools, labor, trucks, buildings and other inputs needed to produce and distribute goods and services.

6. law of supply and demand Natural laws regulate capitalist economies such that as demand for an item increases, prices rise. socialism An economic system in which the raw materials and the means of producing and distributing goods and services are collectively owned.

7. core economies The wealthiest, most highly diversified economies with strong, stable governments. peripheral economies Economies that rely on a few commodities or even a single commodity, such as coffee, peanuts, or tobacco, or a single mineral resources, such as tin, copper, or zinc.

8. semiperipheral economies Economies characterized by moderate wealth and moderate diversification. primary sector Economic activates that generate or extract raw materials for the natural environment.

9. secondary sector Economic activities that transform raw materials into manufactured goods. tertiary sector Economic activity related to delivering services, including the creation and distribution of information.

10. gross domestic product The monetary value of the goods and services that a nation’s work force produces over the course of the year. monopoly A situation in which a single producer dominates a market.

11. oligopoly A situation in which a few producers dominate a market. conglomerates Large corporations that own “smaller” corporations acquired through merger or acquisition.

12. automate To use the computer as a means to increase worker’s speed and consistency or as a source of surveillance. informate To use the computer to empower workers with decision-making tools, such as employee scheduling software intended to ensure that a sufficient number of employees are scheduled for the busiest times and shifts.

13. political system The institution that regulates the use of and access to power that is essential to articulating and realizing individual, local, regional, national, international, or global interest and agendas. power The probability that an individual can achieve his or her will even against another individual’s opposition.

14. authority Legitimate power in which people believe the differences in power are just and proper, that is, people view a leader as being entitled to give orders. traditional authority Authority that relies on time-honored norms that govern the selection of someone to a powerful position and specify responsibilities and conduct for the individual selected.

15. charismatic authority A type of authority that derives from the exceptional and exemplary qualities of the person who issues the commands. legal-rational authority A type of authority that rests on a system of impersonal rules that formally specifies the qualifications for occupying a powerful position.

16. government The organizational structure that directs and coordinates people’s involvement in a country's or some other territory’s political activities. democracy A system of government in which power is vested in the citizen body, and in which members of that citizen body participate directly or indirectly in the decision-making process.

17. totalitarianism A system of government characterized by a single ruling party led by a dictator, an unchallenged official ideology that defines a vision of the “perfect” society and the means to achieve that vision and a system of social control that suppresses dissent and opposition and centralized control over the media and the economy.

18. authoritarian government A system of government in which there is no separation of power and a single person, group, or social class holds all power. power elite Those few people who occupy such lofty positions in the social structure of leading institutions that their decisions have consequences affecting millions of people worldwide.

19. pluralist model A model that views politics as an arena of compromise, alliances and negotiation among special-interest groups and power as something that is dispersed among those groups. special-interest groups Groups of people who share an interest in a particular issue and form an organization with the goal of influencing public opinion and government policy.

20. political action committees (PACs) Committees that raise money to be donated to the political candidates that are most likely to support their special interests.