The economic system in which children are likely to carry on the economic roles played by their parents is called a Traditional economy Traditional economy
In his book Wealth of Nations, Adam Smith explained how Markets regulate economic activity Markets regulate economic activity
The economic condition that exists between businesses that sell the same product is called Competition Competition
A contract is an agreement that is Legally binding Legally binding
Economies that are closest to the pure market model are classified as Capitalist Capitalist
Ownership of private property is a characteristic of Free enterprise Free enterprise
The economic system in which the governments role is most limited is Capitalism Capitalism
In the circular flow model, the exchange of goods and services in the economy are represented by the Product market Product market
The standard of living Is measured as how much on average ever person in a country is able to consume in a specified period of time. Is measured as how much on average ever person in a country is able to consume in a specified period of time.
Insuring bank deposits is an example of the pursuit of the goal of economic Security Security
Scarcity of resources leads the U.S. economy to pursue the goal of the economic efficiency efficiency
If the number of workers in the population grows faster than the average production of each worker, the standard of living will Fall Fall
System where the government/powerful ruler decide prod and consumption Command economy Command economy
System were the government and individuals are involved in prod and consumption Mixed economy Mixed economy
System where the means of prod are mostly privately owned and operated for profit Free market Free market
The way a country sets up the production and consumption of G&S Economic system Economic system
System were the producers and consumers make econ decisions Market economy Market economy
Income when one sells or rents a factor of production Factor payment Factor payment
System where custom/ tradition determines production and consumption Traditional economy Traditional economy
Every society is faced with three economic questions: What goods and services should be produced? How should they be produced? Who should get what is produced? How a society answers those questions depends on its economic goals. These goals include economic freedom, efficiency, equity, growth, security, and stability. L2: What? How? For whom? L3: Need 5: economic freedom, efficiency, equity, growth, security, and stability
How do mixed economies divide the decision making?
Most countries today have a mixed economy, in which both the govt and indiv have a voice in economic decisions. Who decides what varies greatly. Some countries, incl the US, min govt regulation of the mkt. Others, like China, still exercise considerable govt control over economic activities. L2: authoritarian socialist (Communist), capitalist, democratic socialist L3: auth soc: Govt owns/controls almost all factors of prod-command), capitalist: Indiv own factors of prod- market, dem soc: Govt owns some factors of prod- lmt key industries: elec, phone- market
What are the key characteristics of the US economic system?
L2: Need 5: economic freedom, limited government, competition, binding contracts, equal opportunity, profit motive, and property rights. L3: economic freedom (Laissez-faire/choose job, live, products), limited government (regulates w/o controlling indiv, firms, or mkts), competition (Firms are free to compete- benefits the consumer), binding contracts (Right to enter & legal), equal opportunity (Legal right to seek education & compete in marketplace), profit motive (Provides incentive to work and create new businesses), and property rights (Right to sell, buy, & control the use of our property).