Resource Allocation in Different Economic Systems Flashcards
1
Q
What is transition economies?
A
When the economic system changes from one to another.
2
Q
What is the market economy?
A
Allocation decisions made by price mechanism.
3
Q
What is the planned economy?
A
It is where the government controls all allocation.
4
Q
What are some traits of a planned economy?
A
- Focuses on capital goods
- creates a lot of factory jobs
- wants to stay competitive
- Price Fixing
5
Q
What are some issues of transition?
A
- Structural Unemployment
- International Trade
- Inflation
- less price fixing, charges actual price, prices go up.
- Inequality :(
