Podcast
Questions and Answers
What primarily determines prices in a capitalist economy?
What primarily determines prices in a capitalist economy?
- Supply and demand (correct)
- Global markets
- Cultural traditions
- Government regulations
In a command economy, private ownership of resources is common.
In a command economy, private ownership of resources is common.
False (B)
What is the key feature of socialism?
What is the key feature of socialism?
Collective or state ownership of key industries and resources.
A mixed economy combines elements of both ______ and ______.
A mixed economy combines elements of both ______ and ______.
Match the economic systems with their characteristics:
Match the economic systems with their characteristics:
Which economic system is characterized by minimal use of currency and barter?
Which economic system is characterized by minimal use of currency and barter?
In a mixed economy, the private sector is the sole driver of economic activities.
In a mixed economy, the private sector is the sole driver of economic activities.
Identify one advantage of a command economy.
Identify one advantage of a command economy.
In capitalism, the government's role is ______.
In capitalism, the government's role is ______.
Which of the following best describes a traditional economy?
Which of the following best describes a traditional economy?
Flashcards
Economic System
Economic System
How a society organizes producing, distributing, and consuming goods/services.
Capitalism
Capitalism
Economic system where most decisions are made by individuals and businesses, resources are privately owned, and prices are determined by supply and demand.
Command Economy
Command Economy
Economic system where the government controls all economic decisions, resources, and production.
Mixed Economy
Mixed Economy
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Traditional Economy
Traditional Economy
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Socialism
Socialism
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Free Market
Free Market
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Private Ownership
Private Ownership
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Supply and Demand
Supply and Demand
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Market Economy
Market Economy
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Study Notes
Economic Systems Overview
- An economic system is the structured way a society organizes production, distribution, and consumption of goods and services to meet societal needs and wants.
Types of Economic Systems
-
Traditional Economy (Subsistence):
- Economic decisions are based on customs, traditions, and historical practices.
- Production methods often remain unchanged.
- Barter and trade are common, and currency use is minimal.
- Found in rural or isolated communities.
-
Market Economy (Capitalism):
- Economic decisions are made by private individuals and businesses.
- Private ownership of resources and production methods is a key feature.
- Prices are determined by supply and demand in a competitive market.
- The government's role is limited, mainly focused on enforcing laws.
-
Command Economy (Socialist):
- Characterized by collective or state ownership of key industries and resources.
- The government plays a major role in planning and controlling the economy.
- The goal is social equality through wealth redistribution and provision of essential services.
- The government has central control over economic decisions, ownership of resources, and production.
- Prices and production levels are set by government planning, not by market forces.
-
Mixed Economy (Private & Public):
- Combines elements of both capitalism and socialism.
- Governments regulate industries and provide public goods.
- Most economic activities are driven by the private sector, but the government intervenes to correct market failures and promote social welfare.
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