econ 2-1

Economic system in which private citizens own and use the factors of production in order to generate profits

capitalism

Free enterprise economy where people carry on their economic affairs freely, but are subject to some government intervention and regulation

modified private enterprise economy

Rise in the general level of prices

inflation

Organized way a society provides for the wants and needs of its people

economic system

Economic system in which supply, demand, and the price system help people make decisions and allocate resources

market-economic

Economy in which competition is allowed to flourish with a minimum of government interference

free enterprise economy

list the 3 types of economic systems

traditional, command, market-economic

economic system in which the allocation of resources and other economic activity is the result of ritual, habit, or custom

traditional

economic system characterized by a central authority that makes most of the major economic decisions

command

list one advantage of a traditional economy

little uncertainty

list one disadvantage of a traditional economy

discourages new ideas

list one advantages of a command economy

little uncertainty

list one disadvantage of a command economy

doesn't meet the wants of consumers

list one advantage of a market economy

can adjust to change

list one disadvantage of a market economy

doesn't provide for the basic needs of everyone in society

because societies face scarcity, decisions concerning \_____________, \______________ and for \______________ to produce must be made

what, how, whom

T OR F? the US is a pure market economy

false

T OR F? a mixed economy is not an economic system

true

list 3 alternative names for the US economy

capitalism, private enterprise, free enterprise

list the characteristics of a free enterprise

economic freedom, profit motive, voluntary exchange, private property, competition

list the advantages of competition

lower prices, good quality, newer products, improved services

an economy that combines the element of the traditional, command and market economies

mixed economy