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Terms in this set (50)
way in which a nation uses it resources to satisfy its people's needs and wants
system in which economic decisions are based on customs that have been handed down from generation to generation
system in which the government controls the factors of production and makes all decisions about their use
system combining characteristics of more than one type of economy
freely chosen activity between buyers and sellers of goods and services
economic system in which private individuals own factors of production
economic system in which the government lets the people do as they choose
money left over after all the costs of production have been paid
whatever is owned by individuals rather than by government
rivalry among producers or sellers of similar goods and services to win more business
wise use of available resources so that costs do not exceed benefits
the attempt to balance an economic policy so that everyone benefits fairly
standard of living
material well being of an individual, group, or nation measured by how well necessities and luxuries are satisfied
expansion of the economy to produce more goods, jobs, and wealth
obligation of individuals in a free enterprise system to function as productive members of society
circular flow of economic activity
an economic model that shows the factors of production and money as flowing continuously between businesses and individuals
free enterprise system
system in which individuals are free to own the factors of production and decide how to use them within certain legal limits set by government / another name for capitalism
the desire to make a profit, which motivates business owners to produce and sell goods and services
this goal seeks to reduce the extreme ups and downs in the standard of living, people's material well being
this goal is that each member of society have the freedom to make decisions in the marketplace and other economic choices, this freedom also requires that people accept the results of their choices
what are the three basic questions an economic system must ask and answer?
what should be produced?
how should it be produced?
for whom should it be produced?
what are the four types of economic systems?
command / controlled
market / capitalist
what are the six characteristic of economic systems?
little or no government control
freedom of enterprise
freedom of choice
what are the differences between the united states economy & mexico's economy?
1776 adam smith wrote "an inquiry into the nature & causes of the wealth of nations"
1776 the declaration of independence
the type of people who settled in america and the type of people who settled in mexico
the government owns most things in mexico like gas stations and private property
law enforcement corruption in mexico
money circulates in the us but in mexico it does not
individuals own companies in america
what are the goals of a free enterprise economy?
trade off among goals
what is the most important responsibility?
the most important responsibility you have is to make sure you can support yourself and your family
explain how the price system determines how goods and services are distributed in the united states
it is distributed based on peoples income and ability to buy items
in which economic system does choice play the biggest role? in which two systems does it play the smallest role?
market economy plays the biggest role, while traditional and command play the smallest role
how does the american economy differ from a laissez faire system?
why does the government put regulations and other limitations on free enterprise?
what two factors determine what is offered for sale in a market economy?
chosen from wants and needs, who is willing to purchase price and quality
what role does profit play in a market economy?
its the reason why people start and produce businesses major role / bankrupt
how are private property rights related to the system of capitalism?
people can buy what they need and afford and what they do with it
what effect does competition have on prices and why?
people will buy more affordable objects than the expensive products
how are the goals of economic freedom and economic security connected?
economic freedom involves making choices and taking risks economic security provides protection against the risks
why is education important to the success of a free enterprise system?
education helps people become productive members of the system, it also helps people elect responsible government leaders and analyze the results of their economic policies
all economic systems...
must answer the same three basic questions
almost all economic systems today are...
who owns the factors of production and makes economic decisions in a market economy?
which of the following groups of people have a traditional economy?
since the 1880's, the role of government in the united states has...
which of the following describes a free enterprise system?
individuals are free to own and control the factors of production
in a free enterprise system, who makes the decisions about what should be produced?
what motivates people to establish new businesses or expand existing ones?
competition forces businesses to...
keep prices low
the goal of economic freedom is to...
allow each member of society to make choices
when the benefits of an economic action exceed the costs...
economic efficiency increases
a law dealing with unemployment compensation helps provide...
economic equity deals with the issue of...
the goal of economic stability is to reduce extreme ups and downs in the...
standard of living
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