Market Economic System Review

These flashcards cover key concepts and terms related to the Market Economic System, including definitions of types of economies, advantages and disadvantages, and specific terminology.

Market Economic System

An economic system that relies on market forces of demand and supply to allocate resources with minimal government intervention.

Planned Economy

An economic system where the government allocates resources and is often associated with a communist political system.

Mixed Economy

An economic system that combines elements of both planned and market economies, with resources being owned and controlled by both private individuals and the government.

Private Sector

The part of the economy that is run by private individuals and firms, aiming to earn profit.

Public Sector

The part of the economy that is directly controlled by the government, aiming to provide services.

Economic Freedom

The level of autonomy that individuals and businesses have to make economic decisions, ranked by the Heritage Foundation.

Advantages of Market Economy

Includes efficiency, freedom of choice, and incentives for hard work.

Disadvantages of Market Economy

Includes income and wealth inequalities, environmental issues, social hardship, and wasteful competition.

Pester Power

The marketing term for children's ability to persuade parents to make purchasing decisions through constant nagging.

Efficiency in Market Economy

The ability of a market economy to respond to customer needs through competition, leading to innovation.

Income and Wealth Inequalities

The condition in market economies where the rich have more economic freedom and choice, often neglecting basic services for the poor.