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Flashcards in Chapter 2 Deck (15):
1

traditional economy

centers on families, clans, or tribes; decisions are based on customs and beliefs; good of the group comes first

2

command economy

government makes economic decisions, determines what to produce, how to produce, and who gets products

3

market economy

driven by choices of consumers and producers; consumers spend money, go into business, sell their labor as they wish; producers decide how to use their resources to make the most money

4

Karl Marx

lived during the industrial revolution; argued factory owners used workers as resource, exploited workers by keeping wages low to increase profits, workers would rebel, establish classless society

5

socialism

government owns some of the factors of production

6

communism

no private property, little political freedom

7

laissez faire

government should not interfere in economy

8

capitalism

system having private ownership of factors of production

9

product market

market where goods and serves are bought and sold

10

factor markets

market for the factors of production (land, labor, capital, entrepreneurship)

11

advantages of market economies

individuals free to make economic choices, less government control means political freedom, better use of resources

12

disadvantages of market economies

has no way to provide public goods and services, does not give security to sick or aged

13

mixed economies

has elements of traditional, command and market systems

14

nationalize

to change from private to government ownership

15

privatize

to change from government to private ownership