Podcast
Questions and Answers
What is an economic system?
What is an economic system?
Term used to describe how a nation is organized for production.
What are the 3 kinds of economic systems?
What are the 3 kinds of economic systems?
- Traditional (correct)
- Socialist
- Market (correct)
- Command (correct)
What are models in economics?
What are models in economics?
Simplified pictures of reality.
No modern economic system completely fits the models.
No modern economic system completely fits the models.
What is a traditional economic system?
What is a traditional economic system?
Can you give examples of countries that have traditional economic systems today?
Can you give examples of countries that have traditional economic systems today?
What characterizes a market economic system?
What characterizes a market economic system?
What are market systems also known as?
What are market systems also known as?
What is capitalism?
What is capitalism?
What kind of economic system does the U.S. have?
What kind of economic system does the U.S. have?
Who are considered competitors in an economic context?
Who are considered competitors in an economic context?
In market systems, how is success determined?
In market systems, how is success determined?
What is a command economic system?
What is a command economic system?
What decisions does the government make in a command economic system?
What decisions does the government make in a command economic system?
Can you give examples of Communist countries?
Can you give examples of Communist countries?
What is the idea of a communist country?
What is the idea of a communist country?
What happens if you are a famous person in a Communist country?
What happens if you are a famous person in a Communist country?
What do all 4 economic systems have in common?
What do all 4 economic systems have in common?
What are the 4 questions that each economic system must answer?
What are the 4 questions that each economic system must answer?
Although each economic system must answer the 4 questions, they answer the questions ____________.
Although each economic system must answer the 4 questions, they answer the questions ____________.
In a traditional system, who decides what is produced?
In a traditional system, who decides what is produced?
In a market system, who decides what is produced?
In a market system, who decides what is produced?
In a command economic system, who decides what is produced?
In a command economic system, who decides what is produced?
In a traditional system, how is production determined?
In a traditional system, how is production determined?
In a market system, how is production determined?
In a market system, how is production determined?
In a command system, how is production determined?
In a command system, how is production determined?
In a traditional system, who receives the goods?
In a traditional system, who receives the goods?
In a market system, who receives the goods?
In a market system, who receives the goods?
In a command system, who receives the goods?
In a command system, who receives the goods?
In a traditional system, who owns the means of production?
In a traditional system, who owns the means of production?
In a market system, who owns the means of production?
In a market system, who owns the means of production?
In a command system, who owns the means of production?
In a command system, who owns the means of production?
What are mixed economies?
What are mixed economies?
What defines a market economy?
What defines a market economy?
What defines a mixed economy?
What defines a mixed economy?
What defines a command economy?
What defines a command economy?
What book did Karl Marx and Friedrich Engels write in 1848?
What book did Karl Marx and Friedrich Engels write in 1848?
What did Marx and Engels claim?
What did Marx and Engels claim?
Who made up the ruling classes during the Middle Ages?
Who made up the ruling classes during the Middle Ages?
Who made up the lower classes in Europe?
Who made up the lower classes in Europe?
What did Marx say about the middle class?
What did Marx say about the middle class?
What does exploiting mean?
What does exploiting mean?
What is the lower class also known as?
What is the lower class also known as?
What is proletariat?
What is proletariat?
What did Marx believe?
What did Marx believe?
What is communism?
What is communism?
Since there would be only one class, the working class, there would no longer be...
Since there would be only one class, the working class, there would no longer be...
What did Marx predict?
What did Marx predict?
What happened in 1917?
What happened in 1917?
What was the 2nd revolution?
What was the 2nd revolution?
What did the Russian Communist party create?
What did the Russian Communist party create?
Who rose to power in the mid-1920s?
Who rose to power in the mid-1920s?
What did Stalin attempt to do when he became leader?
What did Stalin attempt to do when he became leader?
What kind of plans did Stalin institute?
What kind of plans did Stalin institute?
What are 5-year plans?
What are 5-year plans?
What are quotas?
What are quotas?
Study Notes
Economic Systems Overview
- Economic systems dictate how nations organize production and resource allocation.
- Three main types of economic systems: traditional, market, and command economies.
Traditional Economic System
- Roles and economic practices are inherited from previous generations.
- Common in small agricultural communities in parts of South America, Asia, and Africa.
Market Economic System
- Decisions arise from individual choices by buyers and sellers.
- Also known as free enterprise systems, where capitalism prevails with private ownership of production.
- The U.S. economy is approximately 90% market and 10% command.
Command Economic System
- The government is the primary decision-maker, owning production means.
- Decisions include what goods and services to produce and how to utilize labor.
- Examples of command economies can be found in countries like Cuba, Vietnam, the former Soviet Union, and China.
Economic System Functions
- All four systems must address four fundamental questions:
- What goods & services should be produced?
- How should these goods and services be produced?
- Who will receive the goods and services produced?
- Who owns the means of production?
- Each system provides different answers based on their structure.
Economic Decisions in Systems
- Traditional systems rely on customs and traditions for production and ownership.
- Market systems depend on individual and corporate profit motives.
- Command systems centralize authority, with the government making all significant decisions.
Mixed Economies
- Feature a combination of private enterprise and government ownership.
- Decisions in mixed economies are influenced by both consumers/businesses and government.
Karl Marx and Friedrich Engels
- Co-authored the "Communist Manifesto" in 1848, arguing that class struggles are inherent.
- Ruling classes historically included the Roman Catholic Church and nobility, while lower classes comprised peasants and the burgeoning middle class.
Proletariat and Class Struggle
- The proletariat refers to the working class, whom Marx viewed as exploited by the middle class.
- Marx theorized that discontent among workers would lead to a communist revolution.
Marxist Predictions
- Marx anticipated a worldwide overthrow of capitalist regimes, leading to a classless society.
- He suggested that the initial communist state would require dictatorial authority to suppress capitalist opposition.
Historical Context in Russia
- The Russian Revolution of 1917 saw the Communist Party, under Lenin, seizing power to establish the Soviet Union.
- Joseph Stalin later rose to prominence, initiating rapid industrialization through five-year plans focused on production goals and resource management.
Five-Year Plans and Quotas
- Stalin’s plans set ambitious targets to modernize the Soviet economy, providing structured goals for resource allocation.
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Description
Test your knowledge of key concepts from Economics Chapter 2 with these flashcards. Explore terms related to economic systems, models, and their definitions. Enhance your understanding of how nations organize production and the various economic models in play.
