BUS 250 EXAM PREP QUESTIONS WITH VERIFIED
ANSWERS
What are the core traits of capitalism? - Private property, market coordination, voluntary
exchange, profit-seeking behavior.
Define Sustainable Capitalism. - A market system that supports societal and
environmental wellbeing and remains stable over time.
What is the "Iceberg Metaphor" in economics? - A way to visualize how visible problems
(e.g., inequality) are shaped by deeper rules and global forces.
What's the difference between shareholders and stakeholders? - Shareholders own
stock; stakeholders include all who are affected by a company.
Name two strengths of American capitalism. - High innovation and deep financial
markets.
Name two weaknesses of American capitalism. - Rising inequality and environmental
harm.
What's the relationship between government and markets in capitalism? - Governments
create and structure markets; "free market" is a misleading term.
Why is wealth inequality greater than income inequality? - Due to accumulation,
compounding, inheritance, and unequal access to investments.
What did Hanauer argue about capitalism? - It must be managed democratically to
benefit the many, not just the wealthy few.
What does Stiglitz say is the "true wealth" of a nation? - The ability to sustainably deliver
high living standards to all citizens.
Why is GDP criticized in sustainable capitalism? - It ignores wellbeing, inequality, and
environmental impact.
What is the "Iceberg Metaphor"? - A way to show that what we see (symptoms) is
shaped by underlying rules and global forces.
What does the Hanauer Memo argue about inequality? - It's unnecessary, self-
defeating, and created by policy — not natural laws.
, What is neoliberalism? - An ideology built on neoclassical economics that favors free
markets, privatization, deregulation, and trickle-down policies.
What is the appeal of neoliberalism? - It emphasizes freedom, appears mathematically
sound, simplifies policy, and aligns with profit-based logic.
How does neoliberalism portray markets? - As natural systems governed by laws like
gravity — unquestionable and inevitable.
What role do ideas play in economics? - Ideas shape how we understand reality and
what policies we consider possible.
What is the critique of Econ 101 "laws"? - They're not always empirically supported and
often restrict innovative policymaking.
What is trickle down economics? - An economic concept believed by Republicans
during the 1920s and early Great Depression where the wealthy and businesses would
pass down money to workers and the poor with money saved by lower taxes.
What is a "political order"? - A dominant economic worldview that shapes policy across
party lines and governs how the economy is run.
When did the New Deal Order begin and end? - Started in the 1930s under FDR and
lasted until the late 1960s/early 1970s.
Keynesian economics - Economic theory based on the principles of John Maynard
Keynes stating that government spending should increase during business slumps and
be curbed during booms.
What were core features of the New Deal Order? - Government intervention, Keynesian
economics, labor protections, and high taxes on the wealthy.
What caused the decline of the New Deal Order? - Economic instability, Vietnam War,
inflation, globalization, and weakened unions.
What ideology replaced the New Deal Order? - the neoliberal order
What are the core tenets of the Neoliberal Order? - Free markets, deregulation, tax
cuts, globalization, trickle-down economics.
What major financial regulation was repealed in 1999? - he Glass-Steagall Act.
What was the impact of welfare reform in the 1990s? - Reduced aid for the poor while
increasing corporate tax breaks.
ANSWERS
What are the core traits of capitalism? - Private property, market coordination, voluntary
exchange, profit-seeking behavior.
Define Sustainable Capitalism. - A market system that supports societal and
environmental wellbeing and remains stable over time.
What is the "Iceberg Metaphor" in economics? - A way to visualize how visible problems
(e.g., inequality) are shaped by deeper rules and global forces.
What's the difference between shareholders and stakeholders? - Shareholders own
stock; stakeholders include all who are affected by a company.
Name two strengths of American capitalism. - High innovation and deep financial
markets.
Name two weaknesses of American capitalism. - Rising inequality and environmental
harm.
What's the relationship between government and markets in capitalism? - Governments
create and structure markets; "free market" is a misleading term.
Why is wealth inequality greater than income inequality? - Due to accumulation,
compounding, inheritance, and unequal access to investments.
What did Hanauer argue about capitalism? - It must be managed democratically to
benefit the many, not just the wealthy few.
What does Stiglitz say is the "true wealth" of a nation? - The ability to sustainably deliver
high living standards to all citizens.
Why is GDP criticized in sustainable capitalism? - It ignores wellbeing, inequality, and
environmental impact.
What is the "Iceberg Metaphor"? - A way to show that what we see (symptoms) is
shaped by underlying rules and global forces.
What does the Hanauer Memo argue about inequality? - It's unnecessary, self-
defeating, and created by policy — not natural laws.
, What is neoliberalism? - An ideology built on neoclassical economics that favors free
markets, privatization, deregulation, and trickle-down policies.
What is the appeal of neoliberalism? - It emphasizes freedom, appears mathematically
sound, simplifies policy, and aligns with profit-based logic.
How does neoliberalism portray markets? - As natural systems governed by laws like
gravity — unquestionable and inevitable.
What role do ideas play in economics? - Ideas shape how we understand reality and
what policies we consider possible.
What is the critique of Econ 101 "laws"? - They're not always empirically supported and
often restrict innovative policymaking.
What is trickle down economics? - An economic concept believed by Republicans
during the 1920s and early Great Depression where the wealthy and businesses would
pass down money to workers and the poor with money saved by lower taxes.
What is a "political order"? - A dominant economic worldview that shapes policy across
party lines and governs how the economy is run.
When did the New Deal Order begin and end? - Started in the 1930s under FDR and
lasted until the late 1960s/early 1970s.
Keynesian economics - Economic theory based on the principles of John Maynard
Keynes stating that government spending should increase during business slumps and
be curbed during booms.
What were core features of the New Deal Order? - Government intervention, Keynesian
economics, labor protections, and high taxes on the wealthy.
What caused the decline of the New Deal Order? - Economic instability, Vietnam War,
inflation, globalization, and weakened unions.
What ideology replaced the New Deal Order? - the neoliberal order
What are the core tenets of the Neoliberal Order? - Free markets, deregulation, tax
cuts, globalization, trickle-down economics.
What major financial regulation was repealed in 1999? - he Glass-Steagall Act.
What was the impact of welfare reform in the 1990s? - Reduced aid for the poor while
increasing corporate tax breaks.
