Distribution Of Economic Resources Flashcards
Define the term public sector
The public sector is the part of the economy that is owned and controlled by the government. It provides services to the public that may or may not be provided by the private sector. It consists of local and national government and state-owned organisations.
Define the term private sector
The private sector refers to businesses owned by private individuals that produce and sell goods and services with the aim of making a profit.
Define the term economy
An economy refers to the way in which goods and services are made, sold and used in a country.
Define the term economic resources
Economic resources are the inputs that are used to create goods or provide services
Define the term a centrally planned economy
A centrally planned (or command) economy is one where the government has a lot of control over economic resources and decision-making. Eg North Korea
Define the term a free market economy
A free market (or capitalist) economy is one where private individuals control resources, own businesses and make all the decisions about what goods and services will be produced. Eg USA
Define the term a mixed economy
mixed economy is one that combines elements of the free market and centrally planned systems. It involves sharing the production of goods and services between government and private individuals. Eg Ireland
What is the circular flow of income
The circular flow of income shows how economic resources and wealth move through an economy. It shows how individuals, organisations and the government work together to distribute the economic resources used to produce goods and services.
