LS 6 Flashcards
What is a free market?
Free market economies/ free enterprise economies/ capitalist economies/ market economies
- the resources are allocated by the market mechanism as opposed to the government.
What is a mixed economy?
This is where more resources are allocated through government planning as opposed to the market mechanism.
What is a command economy?
Where most resources are allocated by the government
Which type of economy has the highest quality goods and most innovation?
Free market economies- because firms want to be the most competitive so they produce better goods and produce new more innovative goods.
Who was Adam Smith?
A boomer who said that the ‘invisible hand’ would allocate resources to everyone who needs it through the free market economy.
Who was Friedrich Hayek?
He argues that free market economies are always better because it promotes trade and wealth.
Who was Karl Marx?
He created a theory that said the workers will always overthrow the employers in the end, and he promoted violent methods.
What does Laissez-faire mean?
Adopting a positive attitude towards free market economy
