Economic Systems Flashcards
Scarcity
The limited supply of something
Three basic economy 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, beliefs, and traditions of the past
bartering
trading without using money
Command Economy
All 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 place
free enterprise
competition between companies ( shifts prices 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
a way to rank countries to 0 to 100 percent free.
Nation-State
Country
-Japan
-South Korea
Communism
A society where everyone owns everything
Government distributes wealth
Capitalism
Private citizens own all means of production. No government control
Human Resources
YOU-Person and their skills
Supply and Demand
Amounts of a product available and people willingness to purchase a product.
