Economic Systems Flashcards
Where would Milton Freidman fall on the economic spectrum?
He advocated for free market so he would fall near the right
Communism Vs. Socialism
Communism allows government to control resources and property. Socialism means all citizens share equally in economic resources.
Why is private property so important for the free market?
It promotes efficiency by giving the owner of resources motive to increase value.
Profit motive Vs. Self interest
Desire for financial gain as a motive for economic activity. Self interest is interest in your own personal gain.
What 3 questions do economic systems anwser?
What will be produced? How will it be produced? How will it be distributed?
Who used the term “invisible hand”? What does it mean?
Adam smith used the term. It’s the process of self interested individuals operating through mutual interdependence.
Denmark economics
Denmark has a free market capitalist economy with a strong welfare net for citizens
Economics
A branch concerned with the production, consumption, and transfer of wealth.
A synynom for command economy is?
Planned economy
Left wing
The left wing supports and seeks to achieve social equality. They want more government control, usually opposes hierarchy
What is scarcity?
The gap between limited resources and theoretically limitless wants.
Self interest and society.
Self interest allows all individuals to perform their best in order to increase their personal gain. It also dictates a competitive economy.
Why is competition important in the free market?
Competition keeps prices low and quality high.
What’s the opposite of competition?
Monopoly
What’s consumer sovereignty?
It means the desires and needs of consumers controls the output of producers.
