Economic Systems and Their Characteristics

These flashcards cover the key concepts of economic systems, including their characteristics and definitions.

What are the three central questions in economics?

What to produce, how to produce, and for whom to produce.

What is a planned economy?

An economic system where the government makes all decisions regarding production, including what to produce, how to produce, and who to produce for.

In a pure planned economy, who owns the factors of production?

The government owns all the factors of production.

What are the two forms of planned economy?

Socialism and communism.

What characterizes a market economy?

The factors of production are privately owned, and businesses make decisions about what to produce, how to produce, and for whom.

In a market economy, what can consumers do?

Consumers can buy whatever goods and services they want as long as they can afford them.

What is a mixed economy?

An economic system that combines elements of both planned and market economies.