Chapter 4 - Economic Systems Flashcards
3 prototypes of economic systems
Traditional system
Command system
Market system
It helps the society solve scarcity
Economic system
Oldest type of economic system
Traditional system
It is another traditional economic activity
Taxation
It is stagnant and boring. People resist change and innovations.
Traditional System
It operates like an army
Command System
This kind of system started from England
Market System
A British political economist who stated that, “the key to progress is allowing individuals to pursue their self-interest and to satisfy themselves without government interference as much as possible.”
Adam Smith
Individuals are free to do economic matters. They are free to put up their own business.
Market System
a rapid increase in prices
inflation
a continuing decline in economic activities
recession
the effect of an economic activity to a third party
externality
what are the 4 political economic theories in the modern era?
capitalism
socialism
communism
fascism
it is a society based on the private ownership of resources and means of production which are concentrated in the hands of capitalists
Capitalism
they are the business owners
Capitalists
The french word for the policy, “the government has no role in it except to maintain peace and order and to guarantee national security.”
Laissez-faire
It advocates State ownership of means of production
Socialism
a perfect society that harnesses the full potentials of the people
utopia
A French Socialist who suggested the formation of model communities
Charles Fornier
These are cooperative communities in which everyone would work according to their abilities
phalanxes
Two main forms of socialism
Reform
Revolutionary
it calls for the gradual transformation of the economy from capitalism to a system of worker or State ownership of the means of production
Reform Socialism
Two young German political economists in the nineteenth century who wrote “The Manifesto of the Communist Party”
Karl Marx
Friedrich Engels
A Latin word which Fascism was originated from
fasces
An Italian who was the first leader to the term fascism to describe his government
Benito Mussolini
