Unit Test 3 Flashcards
Economic Systems
The way a society uses resources to satisfy its people’s wants
Market economy
Producers and consumers drive economy not govt
Socialism
Govt owns major industries but also allows private ownership
Profit motive
Driving force where individuals promote self interest
Global economy
All the economies interactions that cross international boundaries
Traditional economy
Economic activists stem from habit or customs roles are defined by ancestors
Capitalism
An economics system based on private ownership of the factors of production.
Consumer sovereignty
Consumers control what gets produced because they’re free to purchase what they want
Nationalization
To change from private ownership to government or public ownership
Mixed economy
An economy that has elements of traditional command and market economy
Command economy
System where govt makes all economic decisions
Communism
Total govt control over a society limited freedom
Voluntary exchange
Buyers and sellers willing engage in transactions
Privatization
To change from govt or public ownership to private
Specialization
Country produces enough goods to be completely self-sufficient.
Examples of tradition command and market economies
T: new guniea
C: North Korea
M: USA
S and W for traditional
S: Will always have job given from ancestor
W: no new technology
S and W for command
S:
W: limited freedom
S and W for market
S: given most freedom
W:
Economic freedom
Producers and consumers have freedom to choose what to buy who to hire and what to produce
voluntary exchange in markets
Buyers and sellers willingly engage in transactions
Private property
Right to control possessions as you wish
Competition
Sellers acting independently to attract consumers by offering best deal
Limited government
Competitor printed efficient use of resources however all real world msrket economies have some degree of govt involvement
