Questions and Answers
What is a command economy?
What is a market economy?
An economy that relies chiefly on market forces to allocate goods and resources and to determine prices.
What defines a traditional economy?
An economic system that relies on habit, custom, or ritual to decide questions of production and consumption.
What is a mixed economy?
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What are tariffs?
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Define quotas.
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What are embargos?
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What does NAFTA stand for?
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What is currency exchange?
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What is GDP?
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Define entrepreneurship.
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What is the standard of living?
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What does literacy rate represent?
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What is human capital?
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What are capital goods?
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Define budget.
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What does credit mean in finance?
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What is specialization?
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What is the European Union?
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What is investment?
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Study Notes
Economic Systems
- Command Economy: Governed by state authority where the government controls all economic activities.
- Market Economy: Based on supply and demand, where prices are determined by market forces.
- Traditional Economy: Driven by cultural customs and rituals, determining production and consumption through established practices.
- Mixed Economy: Integrates elements of both private enterprise and government involvement in the economy.
Trade Concepts
- Tariffs: Taxes imposed on imported or exported goods to regulate trade and protect domestic industries.
- Quotas: Limitations set by governments on the quantity of specific goods that can be imported or exported.
- Embargos: Prohibitions on trade with particular countries, often for political reasons.
- NAFTA: Facilitates trade between the US, Mexico, and Canada, promoting economic collaboration in North America.
Economic Indicators
- Currency Exchange: The valuation of one currency against another, crucial for international trade.
- GDP (Gross Domestic Product): Total market value of all final goods and services produced annually, an indicator of economic health.
- Literacy Rate: Measures the proportion of the population that can read and write, impacting economic development.
- Standard of Living: Reflects the quality of life by assessing the availability of goods and services to individuals.
Human and Capital Assets
- Entrepreneurship: Involves assuming risks to create and manage businesses, driving innovation and economic growth.
- Human Capital: Represents the collective skills and knowledge acquired by individuals through education and experience.
- Capital Goods: Tangible assets like buildings and machinery, essential for production processes over time.
Financial Concepts
- Budget: A financial plan allocating resources for specific objectives or expenditures.
- Credit: Refers to the trust in someone's ability to repay borrowed money, reflecting financial reliability.
- Investment: The action of allocating resources towards assets or ventures with expectations of generating returns.
Careers and Specialization
- Specialization: Focus on a specific profession or skill set, enhancing productivity and expertise in a chosen field.
Political and Economic Associations
- European Union: A political and economic union of European countries promoting free trade and shared economic policies across members.
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Description
Explore key concepts related to command, market, and traditional economies. This flashcard set provides definitions and contrasts between different economic systems. Perfect for students studying economics or preparing for examinations.