| A | B |
|---|
| economic system | organized way a society provides for the wants & needs of it's people |
| traditional economy | the allocation of scarce resources and all other economic activity |
| command economy | economic system in which a central authority makes most of the what, how, and for whom decisions |
| free market economy | economic system in which supply, demand, and the price system help people make decisions and allocate resources |
| inflation | rise in the general level of prices |
| fixed income | income that does not increase even though prices goes up |
| capitalism | economic system in which private citizens own and use the factors of production in order to generate profits. |
| free enterprise | economy in which competition is allowed to florish with a minimum of government interference. |
| voluntary exchange | the act of buyers and sellers freely and willingly engage in market transactions |
| Private Property | Property own by an individual |
| profit motives | driving force that encourages people and organizations to improve their material well being |
| competition | the struggle among selllers to attract consumers |
| private enterprise | free enterprise market economy where people carry on thier own economic affairs freely but subject to governmment intervention and regulations. |
| mixed or modified | free enterprise market economy where people carry on their affairs freely, but are subject to some government intervention and regulation |
| socialism | economic system in which government owns some factors of production and has a role in determining what and how goods are produced |
| communism | economic and political system in which factors of procuction are owned and directed by the state |
