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 and who will consume goods/services?
Traditional Economy
All economic decisions are based on customs,traditions,beliefs of the past
Bartering
Trading without using money
all economic decisions were made by
the government
market economy
Economic decisions are made based on the changes in the prices that occur as buyers and sellers interact in the market
place
Free enter price
Competition between companies (shift prices of goods/services).
Most democratic countries have some characteristics of both systems, so we keep it simple and call them:
Mixed
The Economic continuum
How a free country is on to a scale of 0-100
Nation-state
Country that is ethnically/racially the same. ( Japan)
Communism
A system in which everyone shares wealth. Government redistributes wealth.
Capitalism
Industry is controlled by the private citizen. no government interference
Human resources
A person and their skills
Supply and Demand
Amount of product available and peoples willingness to buy the product
