BST flashcards term 1
(21 cards)
What is an economic system?
It’s how a country organizes its economic activities and solves the economic problem of limited resources and unlimited needs.
What are the 3 basic economic questions?
What to produce?
How to produce?
For whom to produce?
What are the 4 factors of production?
Capital, Labour, Natural Resources, Entrepreneurship
Name the 3 types of economic systems.
Planned Economy, Market Economy, Mixed Economy
Who created the idea of a planned economy?
Karl Marx and Friedrich Engels
Who is known as the father of capitalism?
Adam Smith
In a planned economy, who owns everything?
The government
In a market economy, who owns everything?
In a market economy, who owns everything?
What is the goal of a market economy?
To make profit
What is the goal of a planned economy?
To provide for citizens’ basic needs
Who owns production in a mixed economy?
Both government and private businesses
How are prices decided in a market or mixed economy?
By supply and demand
What is a global economy?
A world where countries trade freely and are connected
Name 2 advantages of a global economy.
More products available
More jobs and investment
Name 2 disadvantages of a global economy.
Poor countries struggle to compete
Workers may be underpaid
What is the economy?
A system where producers and consumers trade goods and services for money
What is a closed economy?
An economy that doesn’t trade with other countries
Name the 3 participants in a closed economy.
Households, Businesses, Government
What are the two markets in the economy?
Goods & Services Market, Factor Market
What is the compensation for each factor of production?
Capital = Interest
Natural Resources = Rent
Labour = Wages
Entrepreneurship = Profit
