chapter2 Flashcards
traditional economy advantages
Little disagreement over goods
traditional economy disadvantages
could be less productive, don’t innovate, people don’t fit their jobs
economic system
The structure of methods and principles that a society uses to produce and distribute goods and services
safety net
a set of government programs, protect people who face unfavorable conditions
Standard of living
level of economic prosperity
specialization
concentration of the productive effort of individuals and businessman on activities
invisible hand
Adam Smith’s philosophy competition and self interest will guide the marketplace
communism
political system in which government owns and controls all resources and means of production and makes economic decisions
laissez fair
The doctrine that the government generally should not interfere in the marketplace
privatization
A range of economic and political system based on the belief that wealth should be evenly distributed throughout society
economic transition
period of change in which a nation changes economic systems
types of economy
traditional, market, centrally planned, mixed
fundamentals of a free-market
private property and markets, competition and consumer choice, voluntary exchange, specialization and market, and limited government involvement
father of free-market economy
Adam Smith
Key parts
competition, self interest
