15 terms

Civics Ch. 2 Vocab

Economic System
way in which a nation uses it resources to satisfy needs and wants
Distribution of Income
money payment for work, the amount of healthcare, education, food, and so on, that each person receives; distribution of goods and services among all members of an economic system
Traditional Economic System
system in which decisions are based on customs, beliefs, and ways of doing things that have been handed down from generation to generation
Market Economic System
system in which individuals own the factors of production and make economic decisions through free interaction while looking out for their own best interests
Command Economic System
system in which the government controls the factors of production and makes all decisions of their use
freely chosen activity between buyers and sellers of goods and services in which business is done with those who best satisfy the needs and wants of those involved
Mixed Economy
system combing characteristics of more than one type of economy with others so that the mix varies and the economic system created leans more toward one pure type than another
economic system in which private individuals own the factors of production and decide how to use them with the limits of the law
Private Property
whatever is owned by the individuals or groups rather than the federal, state, or local governments
money left after all the costs of productions - wages, rent interest, and taxes have been paid
Profit Incentive
desire to make money that motivates people to produce and sell goods and services that others want to buy
rivalry among producers or sellers of similar goods and services to win more business by offering the lowest price or better quality
that which is fair and just
Standard of Living
material well-being of an individual, group, or nation measured by the average value of goods and services used by the average citizen during a given time period
Invisible Hand
term used by Adam Smith to describe the effect of competition in guiding individuals toward working for their own self-interest, thereby achieving the maximum good for society