Economic Systems Flashcards
Scarcity
the limited supply of something
three basic economic questions
what goods/services will be produced? how will goods/services be produced? who will consume the goods/services
Traditional Economy
All economic decisions are based on customs, traditions & beliefs on the past
Bartering
trading without using money
Command Economy
all economic decisions are made by the government
Market economy
Economic decisions are made based on the changes in prices that occur as buyers & sellers interact in the market place
Free enterprise
competition between companies
Most democratic have some characteristics of both systems, so we keep it simple and call them _____
mixed
The economic continuum
how free they are
Nation-state
country
Communism
no private ownership, everyone equally owns everything and works together.
Capitalism
Private ownership of everything
Supply and demand
limited supply of things = higher cost.
