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Econ. > Economic Systems > Flashcards

Economic Systems Flashcards

1
Q

there are two types of economics in today’s society:

A

microeconomics (MIE)

macroeconomics (MAE)

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2
Q

______ is the study of individuals, families, and businesses in the economy

A

microeconomics

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3
Q

______ is the study of the economy as a whole and is concerned with large scaled economic activity

A

macroeconomics

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4
Q

______ studies behavior as it is

A

positive economics

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5
Q

______ involves judgements of what economic behaviors ought to be

A

normative economics

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6
Q

there are three basic types of economic systems:

A

traditional economies
command economies
market economies

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7
Q

A ______ is an economic system in which families, clans, or tribes make economics decisions based on customs and beliefs that have been handed down from generation to generation

A

traditional economy

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8
Q

A ______, the government decides what goods and services will be produced , how they will be produced, and how they will be distributed

A

command economy

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9
Q

A ______, is based on an individual choice, not government directives

A

market economy

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10
Q

In a market economy, ______ and ______ drive the economy

A

consumers and producers

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11
Q

no other economist has had as much influence as ______

A

Adam Smith

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12
Q

Smith was born in ______, in 1723 and studied, and later taught, literature, logic, and moral philosophy

A

Scotland

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13
Q

in the ______, Smith challenged the ideas of mercantilism being economically sound

A

Wealth of Nations

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14
Q

______ is a system by which the government of the homeland controlled trade with its colonies

A

mercantilism

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15
Q

a nation would be wealthier if it engaged in ______

A

free trade

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16
Q

Smith reasoned that people behave in ways that satisfy their ______

A

economic selfinterest

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17
Q

the publisher of The Wealth of Nations stated that a ______ guides the marketplace

A

“invisible hand”

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18
Q

the invisible hand as well as other principles outlined in the Wealth of Nations became the foundation of modern ______

A

economic theory

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19
Q

advantages of traditional economies

A
  • clearly answers the three economic questions
  • produce what best ensures its survival
  • little disagreement over economic goals and rules
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20
Q

disadvantages of traditional economies

A
  • resist change
  • less productive
  • very low standard of living
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21
Q

a system in which the society’s leaders, usually members of the central government, make all economic decisions is called a ______

A

centrally planned economy

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22
Q

modern societies that have adopted command economies have done so largely because of the influence of ______

A

Karl Marx

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23
Q

Marx predicted that in time, the workers would overthrow this system and transfer ownership of the factories to ______

A

public hands

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24
Q

______ is an economic system in which the government owns some or all of the factors of production

A

socialism

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25
Q

______ is an economic system in which the government owns all the factors of production and there is little or no political freedom

A

communism

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26
Q

typically communism will become ______

A

authoritarian

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27
Q

an ______ requires absolute obedience to those in power

A

authoritarian system

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28
Q

______ is established through the democratic political process rather than through the violent overthrow of the government

A

democratic socialism

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29
Q

Marx was born in what is now ______ in ____ and grew up in middle-class comfort

A

Germany 1818

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30
Q

he would be exiled from his homeland for becoming involved in ______

A

radical politics

31
Q

during his travels he met ______, the son of a factory worker

A

Fredrick Engels

32
Q

Marx concluded that the ______ had created a system of wage slavery

A

Industrial Revolution

33
Q

Marx, assisted by Engels, laid out ideas of worker overthrow in ______

A

The Communist Manifesto (1848)

34
Q

What country still had an economy with mostly command elements?

A

North Korea

35
Q

self-interested behavior is behind two features of a market economy:

A

private property rights

market

36
Q

______ are the rights of individuals and groups to own businesses and resources

A

private property rights

37
Q

the ______ is any place where people buy and sell goods and services

A

market

38
Q

______ is vital to any single sale or exchange

A

clear ownership

39
Q

the principle that the government should not interfere in the economy is called ______

A

laissez faire

40
Q

the concept of laissez faire is often paired with ______

A

capitalism

41
Q

______ is an economic system that is based on private ownership of the factors of production

A

capitalism

42
Q

______, the foundation of market economies, operates on the belief that, on their own, producers will create the goods and services that consumers demand

A

capitalism

43
Q

Laissez faire is a ______ economy in its pure form

A

market

44
Q

a ______ is a trade in which both traders believe that what they are getting is worth more than what they are giving up

A

voluntary exchange

45
Q

______ guides voluntary exchange

A

self-interest

46
Q

profit is considered a ______ from a business transaction

A

financial growth

47
Q

______ is the effort of two or more people, acting independently, to get the business of others by offering the best deal

A

competition

48
Q

______ is the idea that because consumers are free to purchase what they want and refuse products they do not, they have the ultimate control over what is produced

A

consumer sovereignty

49
Q

______ acts as a control on self-interested behavior, guiding the market toward a balance between higher value and lower prices

A

competition

50
Q

______ is a situation in which people concentrate their efforts in the areas in which they have an advantage

A

specialization

51
Q

_____ removes the need for households to be self-sufficient, and ______ allow households to trade for what they need

A

specialization

markets

52
Q

the ______ is a tool that economists use to understand how market economies operate

A

circular flow model

53
Q

the model represents the two key economic decision makers in a market economy

A

households

businesses

54
Q

the market for goods and services is called the ______

A

product market

55
Q

the product market isn’t a place as much as it is a ______

A

set of activities

56
Q

the suppliers of the product market are ______

A

businesses

57
Q

the ______ is the market for the factors of production

A

factor market

58
Q

______ own all the factors of production

A

individuals

59
Q

in the factory market, ______ are the consumers and ______ are the producers

A

businesses

individuals

60
Q

Advantages of market economies:

A
  • economic and political freedom
  • profit
  • incentives
  • competition
61
Q

______ is one of the chief advantages of a market economy

A

freedom

62
Q

the ______, a key feature of the market economy, ensures that resources will be allocated efficiently, since inefficiencies would result in lower products

A

profit motive

63
Q

in a ______ economy, the economic good of the individual is the primary focus

A

pure market

64
Q

a ______ economy is the most common type of economic system today

A

mixed

65
Q

a ______ is an economy that has elements of traditional, command, and market economies

A

mixed economy

66
Q

What type of economy dominates in the U.S.?

A

Market Economy

67
Q

What country tried to find a middle ground between socialism and capitalism?

A

France

68
Q

Swedish citizens receive “______” social benefits

A

cradle to grave

69
Q

more recently, many economies have moved away from command systems to ______ systems

A

market

70
Q

to ______ means to change private ownership to government or public ownership

A

nationalize

71
Q

to ______ means to change from government or public ownership to private ownership

A

privatize

72
Q

one way to help privatize an industry is to open it up to ______

A

foreign investors

73
Q

the ______ refers to all the economic interactions that cross international boundaries

A

global economy

Econ. (7 decks)

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