Economics Chapter 2 Flashcards

Traditional Economy

• Characterized by production based on customs and traditions.
• Roles are typically passed down through generations.
• Advantages include manageable interactions and role clarity.
• Disadvantages involve vulnerability to market shifts and limited progress due to rigidity.

Command Economy

• Centralized control over production, investment, prices, and incomes by the government.
• Advantages include low inequality, low unemployment, and focus on common good over profit.
• Disadvantages involve inefficiency, lack of competition, and limited personal economic advancement.

Market Economy

• Decisions made by individuals and the market, fostering innovation and variety.
• Disadvantages include wealth inequality, poor working conditions, and environmental concerns.

Soviet Union

• First nation to declare socialism and pursue a communist society.
• Composed of 14 Soviet republics and expanded influence in Eastern Europe post-World War II.

Hugo Chavez

• Former president of Venezuela known for implementing socialist policies.

Economic Stagnation

• Period marked by slow economic growth lacking significant development or improvement.

Socialism

• Advocates communal ownership or regulation of production, distribution, and exchange.

Capitalism

• Economic system where trade and industry are privately owned for profit.

Traditional Economies Around the World

• Present among communities such as Central African Mbuti, Australian Aborigines, and Inuit populations.

Examples of Command Economies

• North Korea is prominent for its government-controlled economy.

Mixed Economy

• Combines elements of tradition, government, and market forces to address economic questions.
• Ensures private property rights along with individual freedoms.

The Great Depression

• Significant economic decline in U.S. history from 1929 to 1939.
• Led to reforms including unemployment insurance and minimum wage laws.

GDP (Gross Domestic Product)

• Measures the market value of all final goods and services produced in a specific period.

Privatization

• Process transferring control of a public business or service to private ownership.

Collectivism

• Soviet policy aimed at transforming agriculture and reducing the power of wealthier peasants.

Perestroika

• Reform movement in the Soviet Union during the 1980s aimed at economic restructuring.

Great Leap Forward

• An economic and social campaign in China led by the Communist Party from 1958 to 1962.

Nationalism

• Involves transferring major industries from private to state ownership.

European Union

• A political and economic union of 27 European nations focusing on common policies.

Black Market

• Illegal trading of controlled or scarce goods, often involving prohibited items.

Transition to Capitalism

• Complex process faced by nations adapting from previous economic systems with challenges like privatization methods and overcoming systemic inefficiencies.

Explore the advantages and disadvantages of different economic systems in this quiz based on Economics Chapter 2. Understand the traditional economy and command economy concepts through flashcards designed to enhance your learning.