Podcast
Questions and Answers
What characterizes a market economy?
What characterizes a market economy?
- Economic decisions are made by the government.
- Economic decisions are controlled by a single entity.
- Economic decisions are exclusively made in a planned manner.
- Economic decisions are determined by buyers and sellers. (correct)
In which type of economy does the government make major decisions?
In which type of economy does the government make major decisions?
- Market economy
- Mixed economy
- Global economy
- Commanded economy (correct)
What is one advantage of privatization for the government?
What is one advantage of privatization for the government?
- It guarantees equal distribution of resources.
- It leads to increased spending on unnecessary public services.
- It eliminates competition driving prices up.
- It saves money for other businesses. (correct)
Which of the following is a disadvantage of privatization?
Which of the following is a disadvantage of privatization?
In a mixed economy, how are economic decisions made?
In a mixed economy, how are economic decisions made?
Flashcards
Market Economy
Market Economy
Economic decisions are made by buyers and sellers without government control.
Planned Economy
Planned Economy
Government makes economic decisions.
Mixed Economy
Mixed Economy
Economic decisions made by both private and public sectors.
Privatization
Privatization
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Privatization advantage (gov)
Privatization advantage (gov)
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Study Notes
Types of Economic Systems
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Market Economy: Economic decisions are made by buyers and sellers interacting without government intervention. Examples include capitalist countries.
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Planned or Commanded Economy: The government controls major economic decisions. Examples include communist countries like North Korea and Russia.
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Mixed Economy: Economic decisions are made by both private and public sectors.
Privatisation
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Definition: Transferring a business from public to private ownership.
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Advantages for the Government:
- Saves money for other government-funded businesses.
- Increases tax revenue.
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Advantages for Citizens:
- Competition reduces costs for consumers.
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Disadvantages:
- Potential for unequal distribution of wealth.
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Additional Note: Higher quality goods and services can come with a higher price for consumers.
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