Chapter 2 Flashcards
Economy
A financial and social system of how resources flow through society, from production to distribution, to consumption.
Economics
The study of choices that people, companies, and governments make in allocating society’s resources.
Macroeconomics
The study of the country’s overall economic dynamics, such as the employment rate, the gross domestic product, and taxation policies.
Microeconomics
The study of smaller economic units such as individual consumers, families and individual businesses.
Gross domestic product
(GDP) The total value of all final goods and services produced within a nation’s physical boundaries over a given period of time.
Economic System
A structure for allocating limited resources.
Capitalism
An economic system–also known as the private enterprise or free market system–based on private ownership, economic freedom, and far competition.
Supply
The quantity of products that producers are willing to offer for sale at different market prices
Supply Curve
The graphed relationship between price and quantity from a supplier standpoint.
Demand
The quantity of products that consumers are willing to buy at different market prices.
Demand Curve
The graphed relationship between price and quantity from a customer demand standpoint.
Socialism
An economic system based on the principle that the government should own and operate key enterprises that directly effect public welfare.
Communism
An economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government.
Mixed Economies
Economies that embody elements of both planned and market-based economic systems.
