Chapter 13 Market Economic System

These flashcards cover key concepts related to market economic systems, their definitions, characteristics, and implications for consumers and the economy.

An economic system refers to the way in which an economy is organised and run in terms of how it best allocates __ resources.

scarce

A market economic system relies on the market forces of and to allocate resources.

demand, supply

A planned economic system relies on the __ to allocate resources.

government

A mixed economic system is a combination of the planned and __ economic system.

market

Consumers in a market economic system experience __, allowing them to decide what will be produced.

sovereignty

The private sector refers to economic activity of private individuals and firms, with the main aim being to earn __ for its owners.

profit

Public sector refers to economic activity directly involving the __, such as the provision of state education.

government

Private sector investments are made by firms, while the public sector investments are made by the __.

government

The aim of private sector investment is to be more __, while the aim of public sector investment is to improve macroeconomic performance.

competitive

Economic freedom allows consumers and producers in a market economic system to make their own decisions on what to __ and produce.

consume

Monopolies can exploit consumers and lead to __ distribution of income and wealth.

unequal

The public sector may be responsible for certain services because it can control what is on the internet and base decisions on __ costs and benefits.

social

In a market economic system, instability and uncertainty can lead to high __, especially during a recession.

unemployment

A market economic system may not provide adequate public goods such as __ lighting and public roads.

street