Economic Systems Flashcards
What are the 2 types of economics in the world?
Microeconomics
Macroeconomics
What is the study of the individuals, families, and businesses in the economy?
Microeconomics
What is the study of the economy as a whole and is concerned with large-scale economic activity?
Macroeconomics
What studies economic behavior as it is?
Positive Economics
What involves judgements of what economic behavior ought to be?
Normative Economics
What is the way a society uses its scarce resources to satisfy its people’s unlimited wants?
Economic System
What are the three basic types of economic systems?
Traditional Economics
Command Economics
Market Economics
What is an economic system in which families, clans, or tribes make economic decisions based on customs and beliefs that have been handed down from generation to generation?
Traditional Economy
The one goal of a traditional economy is what?
Survival
What is an economic system in which the government decides what goods and services will be produced, how they will be produced, and how they will be distributed?
Command Economy
What is an economic system based on individual choice not government directives?
Market Economy
In a market economy, who decides what good or services will be offered?
Producers
In a market economy, individuals act on what when they make economic choices?
Self-interest
No other economist has had as much influence as who?
Adam Smith
Smith was born where?
Scotland
Smith studied and later taught what?
Literature, Logic, and Moral Philosophy
What is a system by which a government of the homeland controlled trade with its colonies?
Mercantilism
A nation would be wealthier if it engaged in what?
Free Trade
A what guides the marketplace
Invisible hand
Traditional economies clearly answer what?
Three economic questions
What is determined by customs and traditions in traditional economies?
Systems of distribution
Traditional economies resist what?
Change
What is a system in which the society’s leaders usually members of the central government make all economic decisions ?
Centrally Planned Economy
