social 12 (econ)- chapter 2 Flashcards
based of a society’s values- its customs and traditions. (past customs)
traditional economy
relies on government officials to answer the three basic economic questions
command economy
individuals answer the three basic questions. people can produce whatever they want
market economy
combines elements of traditional, market, and command economic models to answer the three questions
mixed economy
free exchange of goods and services
market
the impulse that encourages people to fulfill their needs and wants
self-interest
something that encourages you to behave in a particular way
incentives
government controls nearly all the factors of production
authoritarian socialism (communism)
individuals own the factors of production and answer the basic economic questions
capitalism
the government owns some of the factors of production
democratic socialism
a system under which business can be conducted freely with little government intervention
free enterprise
goods that are owned by individuals rather than government
private property
agreements with one another to buy and sell goods and services
contracts
represents all the exchanges of goods and services in the economy (green)
product market
represents the exchange of resources between households (gold)
resource market
the money paid to households by business firms and the gov in exchange for the households’ resources
income
lowest possible level of unemployment in the economy
full employment
achieved when the overall price level of the goods and services available in the economy is relatively consistent
price stability
refers to people’s economic well being
standard of living
list the five main features of the free enterprise system found in the united states
- own private property and enter into contracts
- make individual choices
- engage in economic competition
- make decisions based on self interest
- participate in the economy with limited government involvement and regulation
competition leads to what two things?
better quality
better prices
list the six major goals for US economic policy
- freedom
- efficiency
- equity
- security
- stability
- growth
