Note
5.0(1)
AP Macroeconomics Study Guides
AP Macroeconomics Ultimate Guide
Unit 1: Basic Economic Concepts
Unit 2: Economic Indicators and the Business Cycle
Unit 3: National Income and Price Determination
Unit 4: Financial Sector
Unit 5: Long-Run Consequences of Stabilization Policies
Unit 6: Open Economy—International Trade and Finance
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Module 1: The Study of Economics
Economics : ==Study of choice and scarcity==
- Every economic issue involves ==individual choice ==
- The United States has a market economy
- No central authority is making choices for the consumer
- An alternative to market economy is ==central economy ==
- In central economy, there is a central authority
\
| Market Economy | Command Economy |
|---|---|
| 1. No central authority | 1. There is a central authority |
| 2. Consumers and producers are free to consume and produce what they think is profitable | 2. The central authority makes production and consumption decisions. |
| Countries practicing : USA | Soviet Union (1917-1991) |
| Producers are free to charge higher prices when there is a shortage of something | Prices are always regulated by the central body |
| Profit is always ensured | Profit is compromised |
\
Failure of Command economy in the Soviet Union- Lack of raw materials to produce
- Nobody ==wanted the products== which were being produced
- Consumers had ==trouble finding== essential commodities (with having to stand at long lines)
- Lack of ==incentives'==
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Note
5.0(1)
AP Macroeconomics Study Guides
AP Macroeconomics Ultimate Guide
Unit 1: Basic Economic Concepts
Unit 2: Economic Indicators and the Business Cycle
Unit 3: National Income and Price Determination
Unit 4: Financial Sector
Unit 5: Long-Run Consequences of Stabilization Policies
Unit 6: Open Economy—International Trade and Finance
Studying for another AP Exam?
Check out our other AP study guides