Market, Planned And Mixed Economic Systems Flashcards
What is a market economy?
Market forces that are allowed to guide the allocation of resources within a society.
What is a centrally planned economy?
An economy where the government plans the allocation of resources.
What is a mixed economy?
The middle between a centrally planned economy and a market economy, where government intervention guides the allocation of resources in an economy
How do consumers guide a market economy (free market)?
Consumers guide a free market through their decisions to buy something or to not buy something, if demand for something in a free market the supply for that good or service will increase.
What is capitalism?
A system of production in which there is a private ownership of productive resources, and individuals are free to pursue their objectives with minimal interference from the government.
Who invented the idea of the invisible hand?
Adam smith
What is the idea of the invisible hand?
The idea that resources are allocated depending on consumers wants and needs.
