Economic systems Flashcards
Scarcity
The limited supply of something
What are the three basic economic questions
- Traditional
- Command
- Market
Traditional economy
All economic decisions are based on Customs, Traditions, and Beliefs of 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 changes in prices that occur as buyers and sellers interact in the changes
Free Enterprise
Competition between companies (shifts of goods/services)
Mixed Economy
Most democratic countries have some characteristics of both systems, so we keep it simple and call them: Mixed
Economic Continuum
How economically free a country is on scale of 0-100.
Nation-State
A country with a government
Communism
Everyone is equal and all property is communally owned
Capitalism
Everything is privately owned and ruled by free competition
Human Resources
Workers and their skills
Supply and Demand
Amount of a product and peoples willingness or ability to purchase.