Economic Systems Flashcards
Economic System
how a nation organizes production
Traditional
people’s economic roles are the same as their parents and grandparents, tradition and customes decide what is produced (food, clothing, etc). Ex: The Amish
Command
the government has total control of the country, making all decisions on how to use resources, people cannot freely open or start businesses. Ex: North Korea
Market
NO government intervention, all prices controlled by consumers, no country has this today
Mixed
SOME government intervention (ex: social security, welfare, business safety inspections), decisions by consumers, businesses, and government determine activity. Ex: USA
Top 2 goals of the Market system
- Freedom
- Growth
(3. Efficiency - in case #3 is xtra cred)
Top 2 goals of the Mixed System
- Freedom
- Security
(3. Growth - #3 in case)
Top 2 goals of the Command System
- Equity
- Security
(3. Stability - #3 in case)
The six economic goals:
Security, Stability, Efficiency, Freedom, Growth, Equity
Economic Security
protecting people from poverty due to unemployment, homelessness, and hunger (ex: raising the min wage, providing apartments)
Economic Effiiciency
keeping track of ALL of a nation’s resources to make sure everything is being used to benefit the nation (ex: everyone will get 2 bread a week, renewable resources)
Economic Freedom
people decide how to spend their money, choose their career, and created their own businesses (ex: lessen restrictions to open businesses, certain career that is very popular)
Economic Equity
command - everyone has a job and will get paid the same wage (doctor & garbage man getting paid equally)
USA - everyone has the same opportunity to get rich (ex: finanncial aid, scholarships)
Economic Growth
countries want to grow & make more money each year (ex: more production, building, stock market, unemployment rate)
Economic Stability
economy does not change dat to day (ex: government controls all prices)
