Ch. 2 Flashcards
4 pillars of free enterprise
Private property, price system, competition, entrepreneurship
private property
the capital and other resources owned by individual or businesses rather than governments
incentive
reason for doing something
price system
the use of prices to allocate scarce resources when buyers and sellers make exchanges in markets, they establish prices for goods, services, and resources
competition
is the rivalry among buyers and sellers in purchase and sale of resources and products
entrepreneurship
the leadership and innovative spirit of entrepreneurships
command economics
the government issues a command to what, how, and who choices (Ex. Iran or old Russia
traditional economics
rely on traditions or customs to make the what, how, and who choices (Ex. Williamson Country Fair
what are the two roles of the household?
consumers and resource owner
what are the three major functions of money
mediums of exchange, store of value, a measure of value
Who is adam smith
the father of economics
what was adam smiths theory
the invisible hand
what are the 7 economic goals of the united states
full employment, economic growth, price stability, economic freedom, economic stability, equity, and efficency
full employment
a job avaliable for everyone willing and able
economic growth
living standards should improve as the output of goods and services
