Different Economic Systems Flashcards
Definition of Economic System
the way in which production is organized and choices are made in an economy
Definition of Market Economy
an economic system where most decisions are taken through the market mechanism
Definition of Planned Economy
an economic system where resources are state owned and allocated by a central body
Definition of Mixed Economy
an economic system where both market forces and government are involved in resource allocation decisions
Definition of Market Mechanism
resource allocation decisions are taken by individual producers and consumers with no government intervention, also known as price mechanism
Definition of Productive Resources
resources that are available to be used
Definition of Privatization
where there is a change in ownership from the public to the private sector
