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Econ Chapter 2 Vocab
Economic Systems and Decision Making
Word | Definition |
---|---|
Market Economy | people and firms act in their own best interest to answer the WHAT, HOW, and FOR WHOM questions. |
Command Economy | central authority makes most of the WHAT, HOW, or FOR WHOM decisions |
Economic System | an organized way of providing for the wants and needs of their people |
Social Security | a federal program of disability and retirement benefits that covers most working people |
Inflation | a rise in the general level of prices |
Fixed Income | income that does not increase even though prices go up |
Traditional Economy | the allocation of scarce resources, and almost all of the economic activity stems from ritual, habit, or custom |