2ND YEAR - Distribution Of Economic Resources

Question 1

What is an economy?

Answer 1

The way in which goods and services are made, sold or used in a country or area. The main aim of an economy is to make the best use of the limited resources available to them.

Question 2

Economic Systems

Answer 2

An economic system is the method by which a country shares economic resources and buys and sells goods and services.

Question 3

Types of Economic Systems

Answer 3

1. Centrally Planned Economy e.g Cuba
2. Free Market Economy e.f USA
3. Mixed Economy e.g Ireland

Question 4

What does an economic system deal with?

Answer 4

1. Allocation of scarce resources
2. Production of goods and services
3. Distribution of goods and services
4. The role of government and non-government sectors of the economy

Question 5

Centrally Planned Economy

Answer 5

• Government makes all decisions about how economic resources are used
• All businesses are owned and run by government
• Communism is the most extreme example of a centrally planned economy
• e.g Cuba

Question 6

Free Market Economy

Answer 6

• Private citizens control resources, own businesses and make decisions about how the goods and services will be produced
• Government has little to no say in how the economic resources are used
• e.g USA

Question 7

Mixed Economy

Answer 7

• Both government and private citizens have control over economic resources
• Government controls essential services e.g health and education
• Private individuals also produce goods and provide services
• e.g Ireland

Question 8

Public Sector

Answer 8

• Part of the economy that is owned and controlled by the government
• Provides essential services e.g health, education

Question 9

Sections of The Public Sector

Answer 9

1. Local Government
2. National Government
3. State-owned organisations

Question 10

Local Government

Answer 10

Provides a range of public services to a local area

Question 11

National Government

Answer 11

Government departments that provide a range of services to the country as a whole

Question 12

State-owned organisations

Answer 12

Businesses set up by the government. They can be commercial or non-commercial.

Question 13

Private Sector

Answer 13

Refers to businesses owned by individuals that produce and sell goods and services with the aim of making a profit
E.g Ryanair, Penney’s

Question 14

Third Sector

Answer 14

• Made up of social enterprises and organisations that do not aim to make a profit e.g charities
• These groups work independent of the government and are often referred to as non-governmental organisations (NGOs)

Question 15

Charities

Answer 15

• Set up to benefit others by raising money
• Depend largely on volunteers to help them provide their services
• e.g Oxfam, Focus Ireland, ISPCA

Question 16

Voluntary Organisations

Answer 16

• Provide services for their members
• Raise money by charging a fee and by organising fund-raisers
• e.g St Patrick’s GAA Club

Question 17

Social Enterprises

Answer 17

• Have a social or environmental aim
• Are run like businesses and aim to make a profit to benefit a specific cause
• e.g Donabate Credit Union

Question 18

Circular Flow of Income

Answer 18

Shows the movement of economic resources and wealth through the economy
(There is a picture in our hardbacks)

Question 19

Closed Economy

Answer 19

This is an economy that does not trade with any other country i.e there are no imports or exports

Question 20

Open Economy

Answer 20

This is an economy where people and businesses trade goods and services with other countries