Traditional Economy Flashcards

Study Notes

Economic Systems

Traditional Economy: Production relies on customs and traditions; roles are inherited across generations.
Command Economy: The government exerts control over economic activities and decisions.
Market Economy: Individuals and the open market dictate economic choices, promoting competition.

Economic Concepts

Specialization: Focus on a narrow range of goods and services, enhancing efficiency and production.
Opportunity Cost: Represents the value of the next best alternative when a decision is made; essential for assessing trade-offs in resource allocation.

Trade Agreements and Policies

NAFTA: North American Free Trade Agreement aimed at reducing trade barriers between the US, Canada, and Mexico.
Tariff: A tax imposed by the government on imported or exported goods, influencing trade dynamics.
Quota: A regulatory limit on the amount of a product that can be imported into a country.
Embargo: A prohibition on trade or movement of goods, often used as a political tool to restrict trade with specific nations.

Economic Terms and Measures

Domestic: Related to home affairs or the internal dynamics of a country.
Exchange Rate: Indicates the value of one currency in relation to another, affecting international trade and investment decisions.
Human Capital: The collective skills, knowledge, and experience possessed by an individual, crucial for workforce productivity.
Capital Goods: Tangible assets (like machinery and buildings) utilized for production, contributing to long-term economic output.
GDP (Gross Domestic Product): A key indicator measuring the total economic output of a country, reflecting its economic health.
Entrepreneur: An individual who initiates and manages a business venture, assuming associated risks while driving innovation and economic growth.

Description

Test your knowledge of different economic systems with these flashcards focusing on traditional, command, and market economies. This quiz helps you understand the characteristics and functions of each system, making it ideal for students of economics.