U3 Economic and Political System Flashcards
1
Q
market economy
A
- aka capitalism/private enterprise
- market forces and self-interest determine goods and services
2
Q
how does market economy view private property
A
- encourages ownership of property by corporations and inidviduals
- can be bought, rented, traded, sold, or given away
3
Q
what is the role of profit in a market economy
A
- profit is the reward for taking risks
- encouraged because it creates employment, new products, and expansion
- belongs to business owners who can choose how to use it
4
Q
Why is competition important in a market economy
A
- companies compete on quality, services, price, rep., warranties
- encourages companies to provide quality products at reasonable prices
- gives consumers access to a greater selection and new products
5
Q
is there any country with a true market economy?
A
- no true market economies exist
- every country has some level of government intervention
- US comes closest to having a market economy
6
Q
what are underdeveloped countries
A
- aka last developed/3rd world nations
- characterized by severe poverty and substandard living conditions
- lack social services, healthcare, education, and infrastructure
- low literacy levels and limited access to tech
- predominantly agricultural or resource based economies
- often face long-term political issues like war, dictatorships, and corruption
7
Q
how are countries classified by economic development
A
- classified by UN and IMF
- generally 3:
1. underdeveloped
2. developing
3. developed
