Economics Chapter 2 REVIEW Economics in the NEWS.

Economics Chapter 2 REVIEW

Economics in

the NEWS

Economics Chapter 2 REVIEW Type of Economic System

Who answers the Basic Economic Questions Traditional

- Custom and tradition, the pastCommand

- Government officialsMarket

- Individuals

Economics Chapter 2 REVIEW

Types of Mixed EconomiesAuthoritarian Socialism or CommunismCapitalismDemocratic Socialism

Economics Chapter 2 REVIEW Extent of Government Involvement in the EconomyAuthoritarian Socialism or Communism

Government owns and controls nearly all the factors of production

Economics Chapter 2 REVIEW Extent of Government Involvement in the EconomyCapitalism

Government involvement is fairly limited

Economics Chapter 2 REVIEW Extent of Government Involvement in the EconomyDemocratic socialism

Government ownership is limited to key industries

Economics Chapter 2 REVIEW5 Features of the U.S. free-enterprise system

• Own private property and enter into contracts

• Make individual choices• Engage in economic competition• Make decisions based on self-interest and • Participate in the economy with limited

government involvement and regulations-

Economics Chapter 2 REVIEWFive Features of the US free- enterprise system

• private property and contracts: Individuals and businesses have the right to own goods: individuals and businesses may enter into contracts

Economics Chapter 2 REVIEWFive main Features of the US free- enterprise system

• individual choices: individuals have freedom of choice in making economic decisions

Economics Chapter 2 REVIEWFive main Features of the US free- enterprise system

• Competition: economic rivalry among businesses selling the same or similar products

Economics Chapter 2 REVIEWFive main Features of the US free- enterprise system

• self-interest: producers and consumers make economic choices for their own benefit

Economics Chapter 2 REVIEWFive main Features of the US free- enterprise system

• limited government involvement and regulations: most economic decisions are made by individuals, not the government

Economics Chapter 2 REVIEWTypes of Exchanges between

• Households and government – • households provide resources

to government for income; • Households pay taxes to

government for services

Economics Chapter 2 REVIEWTypes of Exchanges between

• Households and Businesses • households provide

resources to businesses for income;

• Households pay businesses for products.

Economics Chapter 2 REVIEWTypes of Exchanges between

• Businesses and Government – • Businesses provide products to

government for money payments: Businesses pay government for services in the form of taxes.

Economics Chapter 2 REVIEWTypes of Exchanges between

• Businesses and Government • Businesses provide products

to government for money payments:

• businesses pay TAXES – the government for services.

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

1. Maintaining freedom of choice

- Economic Freedom

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

2. Making the best use of scarce resources - Economic Efficiency

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

3. Ensuring economic justice - Economic Equity

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

4. Ensuring people’s economic well-being -Economic Security

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

5. Achieving full employment and stable prices - Economic Stability

Economics Vocabulary Chapter 2-3

Name the US Economic Goals

6. Increasing the amount of goods and services produced by each worker – Economic Growth