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Economy
| Question | Answer |
|---|---|
| Define the term economy. | the system of how money is made and used within a particular country |
| What are the four sectors of the economy? | household, bank, private business, and government |
| What does the household sector do? | provide resources, consume goods and consume services |
| What does the private business sector do? | sells goods and resources |
| What does the government sector do? | makes laws for all to follow and collects taxes |
| What does the bank sector do? | gives loans and manages the businesses money |
| What does the circular flow model show? | -Businesses get $ from households for goods and services -Households earn income from businesses (for labor or work) -$ put into education can contribute to household income or money made |
| What is the circular flow model? | diagram that is used to represent the money transactions in an economy |
| Give an example of the circular flow model. | A doctor keeps people healthy, People can work and make money, People can pay this person to keep them healthy |
| What do consumers buy and sell? | Buy- resources & Sell- goods and services |
| What is the #1 job of a consumer? | to determine what will be sold through their purchases |
| True or false: Public goods and services would not be available if individuals had to provide them. | True |
| What pays for government programs, public roads, discouraging use of products that are harmful to society, and education? | Income and sales taxes |
| What do taxes affect? | property, food, consumer goods, & services |
| Market Economy | decisions and the pricing of goods and services are guided solely by the individual citizens and businesses |
| What is the role of property rights in market economy? | Increase competition and profit |
| What are property rights? | how a resource or economic good is used and owned |
| What causes economic behavior to change? | incentives |
| What is a Capitalist System? | private ownership of the means of production and their operation for profit |
| What role do entrepreneurs play in a capitalist society? | -someone willing to invest in an idea -Someone good at selling ideas and goods to people -Someone who comes up with new ideas for products or services |
| What are the characteristics of entrepreneurs? | risk taker, driven by high profit reward, inventor, increases economic growth |
| How does competition effect pricing? | Businesses with the same product working against each other can lower prices |
| What is an entrepreneur? | someone who comes up with new ideas for products and services |
| How do people earn income? | people can earn income by exchanging their human resources (work, labor, service) |
Created by:
ckimbro27
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