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Flashcards in Lecture 3 Deck (3)
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1

What is a centrally planned Economy?

An Economy in which a government bureaucracy decides how much of each good to produce how to produce the goods and who gets the goods

2

what is a market economy?

A market economy is an economy in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

3

What is the comparative advantage?

The ability of one person or nation to produce a good at a lower opportunity cost than another person or nation