Economics: The study of how people satisfy their wants and needs. Also the study of supply and demand.

Traditional Economy: People are concerned mainly with obtaining food, clothing, shelter, and other necessities.

Command economy: Operate at the will of the government. The government controls industry and agriculture and decides what goods will be produced, how those goods will be made, and the prices that consumers will pay for them.

Market economy: Operate in response to the laws of supply and demand and to market forces such as the scarcity of goods and resources

Globalization: The reduction of barriers to the movement of goods and services, workers, and money among nations.

Economic System: a system of production, resource allocation and distribution of goods and services within a society or a given geographic area.

Capitalism: an economic system based on private ownership of capital + factors of production.

Laws of Supply and Demand: Free Market: production and distribution of goods are determined by market. What people are willing to pay and how much the company can make.

Marx disagreed with capitalism because he felt it was unequal. The people who invest and create would get payed, but what about the people doing the work? His goal was to create a society that benefited everyone, not just a privileged few. Marxism only ever was a theory though it led to the creation of socialism.

Socialism: an economic system in which the means of production are controlled by the state or the people - not individuals.

• Higher taxes but more benefits

• American conservatives often oppose this system

• Examples: Sweden, France, Norway, Canada, Italy

Communism:

Economic system:

• Elimination of private property

• Distribution of goods based on need- everyone shares in wealth/ownership

• End of classes- revolutionary concept

Political:

• The party controls all means of production and rules

In Practice:

• First communist country was Russia 1917 Russian Revolution (USSR, 1921)

• Dictatorship and command economy

• Most would regard as a failure

• Examples: Chine, Vietnam, North Korea, Cuba

Democracy: Rule by the people. People have the power to make laws.

Constitutional Monarchy: Monarchs have limited power and there is a democracy in place for real power.

Republic: People vote for their representatives to make laws

Dictatorship: Single authority or ruler who usually takes power by force

Absolute Monarchy: Someone who is born into power and holds all the power.

Totalitarian Dictator: Dictator with control over all aspects of the country and people’s lives.

Benevolent Dictator: Rules for the best of the people.