Economic Systems Flashcards
Where are traditional economic systems usually found?
Poorer Third World countries
Largely rely on custom to determine production and distribution questions. These systems are slow to change and are not well equipped to propel society into sustained growth.
What type of economic system is this?
Traditional economic systems
Rely on a central authority to make decisions. The central authority may be a dictator or a democratically constituted government.
What type of economic system is this?
Command Economic System
What is a market economic system?
A market economic system is basically the consumer makes buying decisions based on his or her her own needs and desires and in income.
Is no central authority and customs play very little role.
Producers are motivated solely by profit consideration.
What is capitalism?
Productive resources are owned by private individuals.
Productive resources our own collectively by society and productive resources are under the control of government.
Socialist Economy
What is the circular flow?
A model of economic relationships in a capitalistic market economy.
What are the 5 remaining countries that live under a communist system?
- North Korea
- Cuba
- China
- Vietnam
- Laos
