Economic Systems Flashcards
scarcity
the limited supply of something because of this, countries must make a plan of how to use these limited resources.
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, 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 market price.Q
Free Enterprise
competition between companies (shifts prices of goods/services)
Mixed
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
Country -japan and South Korea
Communism
A society where everyone owns everything. Government distributes wealth.
Captalism
Private citizens own all means of production no Government control.
Human Resources
Person and their skills.
Supply and Demand
Amount of a product available and people’s willingness to purchase a product.
