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chapter 2
| Term | Definition |
|---|---|
| traditional economy | an economy in which production is based on its customs and tradition |
| command economy | an economy in which a central government authority makes all basic economic decisions and controls the factors of production |
| market economy | an economy in which the goverment has little say in what, how and for whom goods are produced and in which the factors of production are owned bt individuals |
| market | the free exchange of goods and services |
| self-interest | the impulse that encourages people to fulfill thier needs and wants |
| incentive | something that encourages an action or effort |
| mixed economy | combines elements of the tradtion, market and command economic models |
| authoritarian socialism | the government owns or controls nearly all factors of production, also known as communism |
| communism | goventment owns or controllsnearly all factors of production, aslo known as authoritarian socialism |
| capitalism | a market based economicsystem in which individuals own and control the factors of production |
| democratic socialism | some means of production and distributing goods are owned and controlled by an elected government |
| free enterprise | system in which private business operates |
| private property | property that is owned by individuals and businesses rather than the government |
| contracts | a legally binding agreement either oral or written between individuals |
| competition | in business, a state rivalry among sellers of the same or similar products |
| voluntary exchange | the unconditional and mutually beneficial transfer of products between producer and consumer |
| product market | the market in which producers offer and consumers purchase final goods and services |
| resource market | a market in which households exchange resourses with businesses and the government |
| income | 1)money payments that households recieve from busines firms and goverment exchange for resourses. 2)funds that businesses take in for supplying goods and services |
| full employment | the lowest possible level of unemplyment in a economy |
| price stability | the condition that exist when overall price levels remain relatively content over a period of time |
| standard of living | people economic well-being as determined by the quality of goods and services they consume in a given time period |
Created by:
marisaraquell
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