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Unit 2 Economics

Terms in this set (22)

economic system
the structure of methods and principles that a society uses to produce and distribute goods and services
Economic Freedom
gives people the ability to make economic decisions for themselves
economic equality
the idea that each individual should receive the same for same skills
economic security
plans set up for unemployment problems solve worry over loss of jobs, sickness, or injury
Entrepreneur
most important person in the economy
Three economic questions
What to produce? How to produce? For whom to produce?
Traditional Economy
An economy in which production is based on customs and traditions and economic roles are typically passed down from one generation to the next.
command economy
An economic system in which the government controls a country's economy.
market economy
Economic decisions are made by individuals or the open market.
mixed economy
An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion.
full employment
the level of employment reached when there is unemployment
Government Regulatory Agencies
Agencies with established authority over healthcare activities; licensing agencies and rate-regulating commissions are examples
tangible property
Property that has physical existence and can be distinguished by the senses of touch and sight.
intangible property
knowledge, skills, talents
Inflation
A general and progressive increase in prices
fixed income
income that does not increase even when prices go up
Capitalism
An economic system based on private ownership of capital
voluntary exchange
the act of buyers and sellers freely and willingly engaging in market transactions
profit
The financial gain made in a transaction
profit motive
the force that encourages people and organizations to improve their material well-being
consumer sovereignty
the power of consumers to decide what gets produced and what you buy
private property
property owned by individuals or companies, not by the government or the people as a whole
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