economic systems Flashcards
1
Q
what are the three main economic questions
A
what goods should be produced
how should the goods be produced
who should the goods be produced for
2
Q
what is an economic system
A
a system that dictates the allocation of resources production and distribution of goods and services in a society
3
Q
what is the market mechanism
A
when goods and services purchased in a system of markets facilitated by the price mechanism - a free market economy
4
Q
what is the planning mechanism
A
when goods and services produced on the basis of resource allocation decided on by the state - pure command economy
5
Q
what is the market and planning mechanism
A
when both markets and the state play a role in allocating resources to make goods and services - the mixed economy
