Introduction Flashcards
KEY TERM:
Economics
the social science that studies the production, distribution, and consumption of goods and services.
KEY TERM:
Economy
a system for coordinating society’s productive activities.
KEY TERM:
Market
a place where good or services are traded.
KEY TERM:
Market Economy
an economy in which decisions about production and consumption are made by individual producers and consumers.
KEY TERM:
Invisible Hand
a phrase used by Adam Smith to refer to the way in which an individual’s pursuit of self-interest can lead, without the individual intending it, to good results for society.
KEY TERM:
Microeconomics
branch of economics that studies how people make decisions and how these decisions interact.
KEY TERM:
Macroeconomics
the branch of economics that is concerned with the overall ups and downs in the economy.
KEY TERM:
Economic Growth
the growing ability of the economy to produce goods and services, leading to higher living standards.
KEY TERM:
Market Failure
the failure of a market to be efficient.
KEY TERM:
Recessions
a downturn in the economy.
Is economic growth good for everyone?
Despite benefiting the majority of people, economic growth has always created losers (past sectors and the environment).
Why is market economics successful?
Coordinate highly complex activities and reliably provide consumers with the goods and services they want – unplanned chaos is governed by the invisible hand. But, the self-interest of the invisible hand can lead to counterproductive behaviour.
