Economies/Governments

What is an economy system?

How a country chooses to distribute resources for producing and delivering goods and services

What are the main resources?

Land, labor, capital, and entrepreneurship

What is land?

Everything on Earth that is in its natural state, or Earth’s natural resources

What is labor?

All the people who work in economy

What is capital?

Includes money needed to start and operate a business. At a national level, capital includes infrastructure such as roads, ports, sanitation facilities, and utilities

What is entrepreneurship?

Refers to the skills of people who are willing to risk their time and money to run a business

What is scarcity?

Difference between wants, needs, and available resources

What are the three basic economic choices?

What goods and services be produced? How should the goods and services be produced? Who receives and consumes these goods and services?

What are the four types of economic systems?

Traditional economy, market economy, mix economy, and command economy.

How is market economy?

There is no involvement of the government in economic decisions, private firms account for all production, and prices change with supply and demand.

What are the good things of market economy?

Lots of freedom to choose jobs, products, and prices; encourages innovation and competition; businesses respond quickly to what people want.

What are the bad things of market economy?

Big gap between rich and poor; no safety nets if people lose jobs or money; risk of monopolies (one company controlling everything)

Who decides what goods and services to produce in market economy?

Business; supply and demand

Who decides how to produce the goods and services in market economy?

Businesses

For whom are the goods and services produced for in market economy?

Consumers

How is command economy?

People have little choice in jobs or products

What are the good things of command economy?

Can provide basic needs like food, housing, and healthcare; easy to organize big projects quickly; everyone is more equal in theory

What are the bad things of command economy?

Very little freedom of choice; government may waste resources; products often low quality and few options

Who decides what goods and serivices to produce in command economy?

Government.

Who decides how to produce the goods and services in command economy?

Government

For whom are the goods and services produced for in command economy?

Whoever the government decides

How is traditional economy?

Economy based largely by custom or religion and jobs are passed down through families

That are the good things of traditional economy?

Stable and predictable (everybody knows their role); strong community values and preserved culture; simple and sustainable lifestyle

What are the bad things of traditional economy?

Few new ideas or progress; limited personal freedom or opportunities; can’t easily handle modern life

Who decides what goods and services to produce in traditional economy?

Customs and beliefs/ ancestors

Who decides how to produce the goods and services in traditional economy?

The people/their ancestors

For whom are the goods and services produced for in traditional economy?

People in the village that need them.

How is mixed economy?

Mix of market + traditional + command systems

What are the good things of mixed economy?

Combines freedom of the market with government protection; safety nets like schools, healthcare, and welfare; encourages growth while protecting people.

What are the bad things of mixed economy?

Balance is hard: too much control = less freedom; too little control = inequality grows; can still face economic ups and downs

Who decides what goods and services to produce in mixed economy?

Business and government

Who decides how to produce the goods and services in mixed economy?

Businesses and the government

For whom are the goods and services produced for in mixed economy?

Consumers

What are the branches of economics?

Microeconomics and macroeconomics

What is microeconomics?

How individual people, families, and businesses make choices about using their limited resources.

At what things does microeconomics look at?

What to buy and how much, how businesses set prices, how supply and demand affect markets, and how co workers and companies interact

What is macroeconomics?

The study of the big picture of a country’s economy

At what things does macroeconomics look at?

How much money a country makes (GDP), how many people have jobs (unemployment), how prices rise and fall (inflation), and how the whole economy grows and shrinks

What is government?

System of authority that leads a community, state or nation

What is there when there is no government?

Anarchy, no rules, no leaders, and often chaos

What does a government do?

Protect the community, make laws, and keep order

Why do people need government?

To protect citizen’s rights, freedoms, and property and prevent abuse of power

What do constitutions do?

Set the rules for how power is used

What is rule of law?

That leaders must obey laws too

What are the types of governments?

Democracy, monarchy, theocracy, oligarchy, republic, and dictatorship.

What is a dictatorship?

A country ruled by a single leader. The leader has not been elected and may use force to keep control. Ex. Venezuela

What is an oligarchy?

Government in which a few people such as a clan, families, or minority that have power

What is a democracy?

Government is elected by the people

What are the two forms of democracy?

Direct and representative democracy

What is the difference between direct and representative democracy with examples?

In direct democracy, citizens vote on every issue ex. Ancient Athens and in representative democracy, citizens elect leaders to make decisions ex. United States, Puerto Rico

What is a republic?

A nation in which power belongs to the law ex. Dominican Republic

What is a monarchy?

Power is in hands of a king, a queen, or an emperor

What is the difference between a traditional monarchy and a constitutional monarchy

In some traditional monarchies, the monarch has absolute power while in constitutional monarchies, there is a democratic government that limits the monarch’s control ex. United Kingdom

What is a theocracy?

Governmental rulers are identical with the leaders of the dominant religion ex. The Vatican

What are the branches of government?

Legislative, executive, and judicial

What does the legislative branch do?

Makes laws (Congress, Parliament, Asamblea Legislativa

What does the executive branch do?

Enforces laws (president, governor, prime minister)

What does the judicial branch do?

Interprets laws (Courts, Supreme Court)

What is checks and balances?

Each branch has powers that limit the others

What are some examples of checks and balances?

Congress makes laws - President can veto - courts can declare unconstitutional

What are the rights of citizens?

Free speech, vote, due process, equality under the law

What are the duties of citizens?

Pay taxes, follow laws, serve jury duty, defend the country if required

What are the responsibilities of citizens?

Vote, stay informed, respect others’ rights, volunteer in community