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12 terms

Economics

STUDY
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Communism
Government controls the means of production, sets prices, wages, standards of production
Socialism
Government provides social services for citizens and pays for these services through a high tax rate for the citizens
Capitalism
Individuals own the means of production; little to no government involvement in the economy
Free Market Economy
Government NEVER interferes with the economy (laissez-faire) (NO regulations are placed upon industries)
Mixed Market Economy
Government interferes in the economy ONLY when it is absolutely necessary to do so (some regulations are placed upon industries)
Free Enterprise
The ability to make your own economic decisions
Karl Marx
Father of Communism; author of The Communist Manifesto
Adam Smith
Father of modern economics; father of Capitalism; author of The Wealth of Nations; believed in pure laissez-faire capitalism
Laissez-Faire
"Hands Off!" No government involvement in the economy
Bourgeoisie
Owners of the means of production; also called the capitalists
Proletariat
Workers; eventually rise up in violent revolution and overthrow the bourgeoisie
Federal Reserve
The central banking institution of the United States - sets interest rates, serves as the federal government's bank, regulates the nation's money supply