Economic Systems Flashcards
1
Q
What is an economic system
A
The framework a country adopts to solve the economic problem
2
Q
Command economy
A
Four questions are decided by a central planning committee
3
Q
Weakness of a command economy
A
Corruption, black market, loss of freedoms, exporting becomes hard
4
Q
Strengths of a command economy
A
Minimises economic fluctuation
5
Q
Free market economy
A
4 questions are answered by the market
6
Q
Strength of market economy
A
Innovation
Most efficient systems
7
Q
Weakness of the market economy
A
Economic fluctuations
8
Q
What is a transition economy
A
An economy that is transitioning from a command economy to a free market economy
9
Q
Why do we have transition economies
A
Lack of infrastructure Hyperinflation Corruption Inequality Shortage in G+s Lower standard of living
10
Q
Characteristics of a transition economy
A
Privatisation
Legal reforms
Liberalisation of market
Macroeconomics stabilisation
