Economic Systems

1. Economic Systems Ms. Ramos Alta Loma High School

2. In truth, all economics today are • Mixed

3. The economic system in which children are likely to carry on the economic roles played by their parents is called a • Traditional economy

4. In his book Wealth of Nations, Adam Smith explained how • Markets regulate economic activity

5. The economic condition that exists between businesses that sell the same product is called • Competition

6. A contract is an agreement that is • Legally binding

7. Economies that are closest to the pure market model are classified as • Capitalist

8. Ownership of private property is a characteristic of • Free enterprise

9. The economic system in which the governments role is most limited is • Capitalism

10. In the circular flow model, the exchange of goods and services in the economy are represented by the • Product market

11. The standard of living • Is measured as how much on average ever person in a country is able to consume in a specified period of time.

12. Insuring bank deposits is an example of the pursuit of the goal of economic • Security

13. Scarcity of resources leads the U.S. economy to pursue the goal of the economic • efficiency

14. If the number of workers in the population grows faster than the average production of each worker, the standard of living will • Fall

15. System where the government/powerful ruler decide prod and consumption • Command economy

16. System were the government and individuals are involved in prod and consumption • Mixed economy

17. System where the means of prod are mostly privately owned and operated for profit • Free market

18. The way a country sets up the production and consumption of G&S • Economic system

19. System were the producers and consumers make econ decisions • Market economy

20. Income when one sells or rents a factor of production • Factor payment

21. System where custom/ tradition determines production and consumption • Traditional economy

22. Who gets what? How do societies decide?

23. Every society is faced with three economic questions: What goods and services should be produced? How should they be produced? Who should get what is produced? How a society answers those questions depends on its economic goals. These goals include economic freedom, efficiency, equity, growth, security, and stability. • L2: What? How? For whom? • L3: Need 5: economic freedom, efficiency, equity, growth, security, and stability

24. How do mixed economies divide the decision making?

25. Most countries today have a mixed economy, in which both the govt and indiv have a voice in economic decisions. Who decides what varies greatly. Some countries, incl the US, min govt regulation of the mkt. Others, like China, still exercise considerable govt control over economic activities. • L2: authoritarian socialist (Communist), capitalist, democratic socialist • L3: auth soc: Govt owns/controls almost all factors of prod-command), capitalist: Indiv own factors of prod- market, dem soc: Govt owns some factors of prod- lmt key industries: elec, phone- market

26. What are the key characteristics of the US economic system?

27. L2: Need 5: economic freedom, limited government, competition, binding contracts, equal opportunity, profit motive, and property rights. • L3: economic freedom (Laissez-faire/choose job, live, products), limited government (regulates w/o controlling indiv, firms, or mkts), competition (Firms are free to compete- benefits the consumer), binding contracts (Right to enter & legal), equal opportunity (Legal right to seek education & compete in marketplace), profit motive (Provides incentive to work and create new businesses), and property rights (Right to sell, buy, & control the use of our “property”).

28. STUDY!!!