| A | B |
|---|
| the way a society produces goods and services and provides and distributes these goods and services to its citizens | Economic System |
| economic system in which there is strong governmental control; all | Communism (Strong Command) |
| economic system in which there is medium governmental control; governmental control is held over key industries such as utilities and transportation; private ownership of businesses is only allowed in nonvital industries; allows competition in smaller private sectors; citizens have the right to choose career and place of employment; practices high taxation | Socialism (Moderate Command) |
| economic system that derives from the principle of individual rights; practices little governmental control; encourages private ownership of business in all sectors; supports competition in all areas; citizens have full freedom to choose career and workplace; practices moderate taxation | Capitalism (Market) |
| economic systems that occur in less developed countries; allows economic decisions to be ruled by tradition; ranks religious and cultural values as more important than economics; jobs are determined according to ancestors’ jobs | Traditional Economies |
| “Father of Modern Economics”; saw the market system acting as an “invisible hand” which leads people to unintentionally promote society’s interests while pursuing their own | Adam Smith |
| intellectual father of modern day Marxist economies; predicted capitalism would be ultimately destroyed by its own inherent contradictions | Karl Marx |
| his ideas about the causes of unemployment revolutionized the macroeconomic theory and profoundly altered the government’s involvement in the economy | John Maynard Keyes |
| synonymous with the market/capitalist economy; emphasizes the private sector; allows ownership of resources and businesses by individuals in society; permits individuals to make economic decisions rather than the government; allows individuals to receive benefits and wages from employers | Private Enterprise System |
| The three main economic systems | Communism, Socialism, Capitalism |
| Another name for the private enterprise system | Capitalism |
| Freedoms do individuals have in a private enterprise system | Buy goods and services, produce and sell goods and, services, choose career or workplace |
| Initiative, risk taking, pioneering spirit, desire for self expression, knowledge of business operations, patience, financial resources, decision-making skills, communication skills, persistence, creativity, ambition | characteristics of an entrepreneur |
| Inventions increase agricultural production and efficiency increases overall standard of living; based on farming | agricultural economy |
| Inventions lead to industry growth; People fled to cities, agriculture employment declined from 90% to 2.9%; people began working in factories; poor working conditions | industrial economy |
| Standard of living increasing; demand for services increasing; people selling their services | service economy |
| Society increasingly needs easily accessible accurate information; Technology development is increasing at an exponential rate; emergence of the Internet & World Wide Web | information economy |
