Economic Systems Overview

These flashcards cover key concepts and facts related to different economic systems, their characteristics, advantages, disadvantages, and notable historical events.

What is an economic system?

A means by which societies or governments organize and distribute available resources, services, and goods.

What are the five factors of production?

Labour, capital, entrepreneurs, physical resources, and information resources or C.E.L.L

In a communistic system, who owns property?

All property, including production, land, and capital, belongs to the state.

What is the primary feature of a capitalist system?

Largely privately owned property and the right to compete freely in markets.

How does a socialistic system determine resource distribution?

A combination of market forces and government regulation.

What is the main aim of a capitalist economy?

To generate profit.

Identify a disadvantage of a capitalist economy.

There can be significant wealth inequality.

What are some advantages of a socialist economy?

Balanced approach combining private and public ownership, provision of public services, reduced inequality.

In a planned economy, what guides economic decisions?

The state controls all economic activity.

What historical event marked the implementation of Marxist theory?

The Russian Revolution of 1917.

Which country is predominantly a market economy with some government regulation?

United States of America.

What is another name for capitalism?

Free-market economy.

In a free-market system, businesses aim to maximize what?

Profit.

If prices are determined by demand and supply, the system is called what?

A market economy.

South Africa is categorized as which type of economic system?

Mixed economy.

Under a system of communism, who owns all businesses?

The government.

What do businesses owned by private entrepreneurs operate in?

The private sector.

List one reason why certain services are not performed by the private sector.

Government provides essential services that may not be profitable for private companies.