| A | B |
|---|
| traditional economy | questions answered by tradition and focussed on tribe or socail unit |
| command economy | questions answered by central authority, everything is set |
| market economy | questions are answered by buyers and sellers based on the demand, each person is looking for self enrichment |
| mixed economy | a mix with elements from different systems |
| self interest | a concern for ones own advantage and well being |
| competition | when two or more people pursue similar interests |
| invisible hand | the coordinating force in a market economy that stimulates people to start their own business, to compete, expand and producing |
| specialization | doing a distinctive task as an expert |
| distant sale | selling and expanding the selling |
| expansion | a sustained increase in an economy's production and employment |
| contraction | a sustained decrease in an economys production and employment |
| role of government | provide defense |
| role of government | administor justice |
| role of government | build and maintain public facilities |
| consumption expenditures | household spending for goods and services |
| laissez faire | let them do as they chose |
| results of self interest and competition | determination of products, proper prices, desirabele quality, invention and inginuity |
| production in capitalism | individuals own resources and pursue selfinterest for profit |
| pay in capitalism | determined by labor and management |
| role of government in capitalism | provides tax-supported social benefits |
| production in socialism | elected government takes control of key industries |
| pay in socialism | trade unions bargain with management |
| government in socialism | allocates reasources and uses taxing power to give out wealth |
| production in communism | sates owns factors of production, managed by bureaucrats, set production quotas |
| pay in communism | wages set by government |
| government in communism | establishes production plans and objectives set by central committees |
| karl marx said what about capitalism | capitalist self destruction through growth and social unrest between controlling bourgeoisie and the opressed poletariat |
| years of karl marx | 1818-1883 |
| stage one | 1700's Agriculture and light manufacturing 791 Alexander Hamilton national bank public credit |
| stage two | mid 1800s transportation, regional specialization, absolute advantages, trade |
| stage three | late 1800s early 1900s industrialization, railroads, entrepreneurs, banking growth |
| stage four | 1920 growth of Consumer goods |
| stage five | 1930s and 40s entrance of government as a central force in US enconomy Fiscal policy |
| fiscal policy | taxing of individuals income |
| stage six | post WWII growth of services dominated industry |
| function of government today | tax buisnesses and individuals to raise most of money government need |
| function of government today | purchase goods and services from buisnesses and individuals |
| function of government today | pay money to individuals to preservate of a minimum living standard to the survival of an industry |
| double coincidence of wants | circumstance in which buyer and seller each has a good or service that the other one wants and is willing to trade |
| barter | to trade by direct and reciprocal exchange of goods and services |
| monetary exchange | to trade by indirect exchange of goods and or services with money |
| money | any item that represents a unit of value, serves as a medium exchange, and acts aqs a store of value, eliminates necessity for double coincidence |
| unit of value | a commodity through which the value or worth of all else can be stated |
| medium of exchange | any item widely excepted as a payment for goods and services |
| store of value | an item that can be accumulated and easily stored or saved |
| scarcity of money | available in limited amounts and supplies only |
| durability | able to exist for a long time without significant deterioration |
| divisibility | capable of being easily divided |
