2. “…the study of how wealth* is created and distributed**.” *“anything of value,” including products produced and sold by business **“who gets what”

3. o Ownership of factors of productionfactors of production o The answer to four basic economic questions about nation’s economic activity What & how much will be produced? ‚How will it be produced? ƒFor whom will it be produced? „Who owns/controls factors of production?

4. “…resources used to produce goods and services.” 1. Land/natural resources 2. Labor 3. Capital 4. Entrepreneurship

5.  CapitalismCommand (Market)(Planned) SocialismCommunism

6.  Pop Machine Pop Machine  Museum Museum  Wendy’s Ad Wendy’s Ad

7. Examples

10. Monetary Policy- Federal Reserve determines size of money supply & interest rates  Controlled by the Federal Reserve (FED)  Seven Member Board  Chairman ©2007 Microsoft PowerPoint

11.  Fiscal Policy- Influences amount of savings and expenditures by altering tax structure and government spending  Controlled by Congress/Budget Process

12. “…a shortfall created when the federal government spends more in a fiscal year than it receives.” U.S. National Debt Clock

13. Key industries owned/controlled by government Land, buildings, and raw materials may be property of state Private ownership permitted to varying degrees People chose own occupations National goals determine what/how produced Uses taxes, rents, and wages to control distribution

14. Karl Marx- Father  Advocated classless society  Citizens own all economic resources  Workers contribute based on ability & received benefits based on need Examples- North Korea & China Centralized planning- sets prices & wages Emphasis on gov’t needs not consumers No job choice- professionals better off than factory workers