economic systems Flashcards
goods
houses, food, clothing
services
teachers, doctors, dishwashers
trade
is the buying selling and exchanging of goods and services
domestic trade
trade within a nation
international trade
trade between nations
benefits of trade
improved standard of living
increased productive capacity
increased earnings for a nation
standard of living
is the level of material well-being that a Nation enjoys
specialization
which is the producing and exporting of those goods that a nation is best suited to produce
a Nation’s system of public works, with their buildings, equipment and workers, is known as its
infrastructure
export
send out and sell to other nations the goods a nation produces
import
bring in and buy from other Nations goods
what is the expenditure of something in order to achieve a goal
cost
economic systems must answer 3 questions
What to make (produce)?
How and by whom should its product be made?
Who gets What’s made?
major economic systems
traditional economy
market economy
command economy
most people in a traditional economy are farmers
??
is an economic system that is controlled nor by the government but by privately owned business
capitalism/ market economy
fundamental economic questions are answered by individual businesses and consumers
free enterprise
characteristics of a market economy
profit motivated
competition
supply and demand
shares of stocks
an economy that is controlled by the government
command economy
there are two types of command economy
communism and socialism
what is a mixed economy
they have features of all 3: traditional, market, and command economies
