Economic Systems Flashcards
What is the limited supply of something?
Scarcity
What are the three basic economic questions?
1.What goods/services will be produced?
2. How will good/services be produced?
3. Who will consume the goods/services?
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 the changes in prices that occur as buyers and sellers interact in the marketplace.
Free Enterprise
A competition between companies(shifts prices of good/services)
Most democratic countries have some characteristics of both systems, so we keep it simple and call them?
Mixed
The Economic Continuum
How economically free a country is on a 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 people’s willingness or ability to purchase it
