Economic Systems Flashcards
Scarcity
The limited supply of something.
When developing the economic plan, each country must ask three basic economic questions:
What goods/ services will be produced?
How will goods/ services be produced?
Who will consume the goods/ services?
Traditional economy
All economic decisions are based on __________
Customs, traditions, and beliefs of the past.
Bartering
Trading without using money.
Command Economy
All economic decisions are made by the ____
Government.
Cuba, North Korea, former east Germany, and Former Soviet Union all have the same type of government:______ The ____________ is in control of everything.
Communist and Government
Free Enterprise
Competition between companies (shifts prices of goods/ services)
Most democratic countries have some characteristics of both systems, so we keep it simple and call them: ______
mixed
The Economic Continuum
A scale that the economic system uses to determine how free or not free a country is economicly.
Nation-state
A country
Communism
No private ownership. Everyone equally owns everything and work together.
Capitalism
Private ownership of everything. Runs off of the idea of free competition.
Supply and Demand
Amount of a product and peoples willingness to buy it.
Human Resource
Workers and their skills.
