Economics Unit 2

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Economy

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24 Terms

1

Economy

A system for coordinating a society’s productive and consumptive activities

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2

Economic Structure

The structure of methods and principles a society uses to produce and distribute goods and services.

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3

Factor Payment

The income received for supplying factors of production like labor, capital, land, and entrepreneurship.

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4

Profit

An amount of money that you gain when you are paid more for something than it cost you to make, get, or do it.

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5

Safety Net

Policies and programs that help individuals and families manage risk

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6

Standard of Living

The material well being of the average person in a given population.

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7

Innovation

The development of ideas

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8

Traditional Economy

Those in which customs and traditions are more important than money

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9

Market

Any place where two or more parties can meet to engage in an economic transaction

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10

Specialization

The process wherein a company or individual decides to focus their labor on a specific type of production

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11

Free Market Economy

The laws of supply and demand provide the sole basis for the economic system, without government intervention

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12

Incentive

Benefits or costs of an action that influence people's decisions and behavior

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13

Competition

Various sellers each try to offer better products, lower prices, and other advantages to choosing their wares over a rival's.

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14

Adam Smith/Invisible Hand

Metaphor that describes the unseen forces of self-interest that impact the free market.

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15

Consumer sovereignty

The idea that consumers hold the power to influence production decisions, based on what goods and services they purchase

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16

Command Economies

A centralized government controls the means of production and determines output levels.

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17

Socialism

An economic system in which major industries are owned by workers rather than by private businesses.

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18

Communism

A political and economic system that seeks to create a classless society in which the major means of production, such as mines and factories, are owned and controlled by the public.

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19

Economic Transition

Countries which are undertaking macroeconomic reforms in an attempt to alter the ways in which their economies are managed.

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20

Privatization

A government-owned business, operation, or property becomes owned by a private, nongovernment party.

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21

Nationalization

The process of taking privately-controlled companies, industries, or assets and putting them under the control of the government

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22

Mixed Economies

An economy organized with some free-market elements and some socialistic elements

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23

Private Property

The ownership of property by private parties

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24

Intellectual Property

Any intellectual creation, such as literary works, artistic works, inventions, designs, symbols, names, images, computer code, etc

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