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33 Cards in this Set
- Front
- Back
Economic System
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the method used by a society to produce and distribute goods and services
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Factor Payments
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the income people receive for supplying factors of production, such as land, labor, or capital
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Patriotism
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the love of one's country; the passion that inspires a person to serve his or her country
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Safety Net
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government programs that protect people experiencing unfavorable economic conditions
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Standard of Living
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Level of economic prosperity
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Traditional Economy
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economic system that relies on habit, custom, or ritual to decide questions of production and consumption of goods and service
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Market Economy
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economic system in which decisions on production and consumption of goods and service are based in voluntary exchange in markets
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Centrally Planned Economy
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economic system in which the central government makes all decisions on the production and consumption of goods and services
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Command Economy
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economic system in which a central authority is in command of the economy; a centrally planned economy
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Mixed Economy
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market-based economic system with limited government involvement
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Market
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an arrangement that allows buyers and sellers to exchange things
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Specialization
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the concentration of the productive efforts of individuals and firms on a limited number of activities
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Households
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a person or group of people living in the same residence
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Firm
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an organization that uses resouces to produce a product, which it then sells
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Factor Market
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market in which firms purchase the factors of production from households
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Profits
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the financial gain made in a transaction
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Product Market
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the market in which households purchase the goods and services that firms produce
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Self-Interest
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one's own personal gain
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Incentive
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an expectation that encourages people to behave in a certain way
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competition
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the struggle amoung producers for the dollars of consumers
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Invisible Hand
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term economists use to describe the self-regulating nature of the marketplace
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Consumer Sovereignty
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the power of consumers to decide what gets produced
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Socialism
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a social and political philosophy based on the belief that democractic means should be used to evenly distribute wealth throughtout a society
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Communism
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a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the central government
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Authoritarian
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requiring strict obedience to an authority, such as a dictator
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Collective
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large farms leased from the state to groups of peasant farmers
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Heavy Industry
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industry that requires a large capital investment and that produces items used in other industries
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Laissez Faire
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the doctrine that states that government generally should not intervene in the marketplace
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Private Property
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property owned by individuals or companies, not by the government or the people as a whole
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Free Enterprise
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an economic system characterized by private or corporate ownership of capital goods; investments that are determined by private decision rather than by state control; and determined in a free market
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Continuum
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a range with no clear divisions
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Transition
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period of change in which an economy moves away from a centrally planned economy toward a market-based system
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Privatize
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to sell state-run firms to individuals
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