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the system of using resources and humans to produce and sell goods and services
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Economy
the system of using resources and humans to produce and sell goods and services
Goods
Items that are useful to people
Services
Actions performed to satisfy a need or to fulfill a demand
Traditional, Market, Command, Mixed
4 types of Economic Systems
Traditional Economy
Economic decisions are based on customes handed down from generation to generation
Traditional Economy
Very few of these exist in the world today
Command Economy
The government makes all economic decisions
Command Economy
Individuals have little or no say about what goods and services to produce and how to produce them
Command Economy
The government decides how much something will cost and which people receive training for particular jobs
Command Economy
The term "communism" applies to this type of economy
Market Economy
Individuals make their own decisions about what to produce, how to produce it, and for whom to produce it
Market Economy
People and businesses make what they think customers want (supply)
Market Economy
Consumers have choices about which goods and services to buy (demand)
Market Economy
Prices are determined by supply and demand
Free Enterprise
A market economy is based on this idea
Free Enterprise
This is the idea that you have the right to own property or businesses and to make a profit without the government interferring
Capitalism
Another name for a market or "free enterprise" economy
Mixed Economy
Most countries are this type of economy, since there are very few pure market or pure command
Mixed Economy
The U.S. has this type of economy because most individuals make decisions, but the government regulates certain areas (example: inspecting meat and other prodcts before you buy it)
Natural Resources
Products of the earth that people use to meet their needs
Natural Resources
Examples: wind, water and oil provide energy to machines
Natural Resources
Example: Good soil and fish are used to produce food
Natural Resources
Example: Stones (granite/iron/ore) can be used for making products
They will export what they do not need by trading it to other countries
What if a country cannot use all that they produce?
They will import it or buy it from another country
What if a country cannot produce as much as they need of a good?
trade
The world's countries are connected to one another in a complex web of _________
tariff
In order to manage trade so that it will benefit a country, governments will sometimes charge a tax added to the price of goods that are imported. This tax is called a _______
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