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38 Cards in this Set
- Front
- Back
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4 practices that set our economic system apart
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private property
price system competition entrepreneurship |
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Adam Smith
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believed nations wealth was dependent
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The Wealth of Nations
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describes principles of system
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laissez-faire economy
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economy works best if left to function on its own without government regulation
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competition
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rivalry among buyers and sellers
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6 areas best fulfilled by government involvement
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safeguarding market system
providing public goods and services dealing with externalities programs to assist those in need programs to help specific groups programs to stabilize economy |
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externalities
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effects of economic activities that fall outside market system
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monopolies
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market with only 1 seller
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public goods and services
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items that can't be provided by market system and must be managed by government
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2 ways to correct harmful externalities
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regulating
taxing |
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regulating
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banishing laws
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subsidy
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payment by government to producers or consumers
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consumers
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people who use goods and services to satisfy their wants
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transfer payments
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payments that represent a redistribution of wealth rather than an exchange for goods or services
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examples of transfer payments
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social Security benefits
pensions welfare |
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G.D.P. stands for
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Gross Domestic Product
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definition of gdp
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total value of goods and services by economy in one year
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our nation's 7 goals
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full employment
economic growth price stability |
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eminent domain
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government power to take private property at a fair price for public purposes
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tariffs
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tax on imports
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antitrust legislation
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laws enacted by Congress and state legislatures that prohibit practices that reduce competition and increase power of monopolies
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free enterprise is an ____ system
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economic
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model
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symplified picture or map of an economy
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entrepreneur
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person who develops new ideas and takes business risks
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founder of economics
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Adam smith
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reduces the cost of exchange
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money
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money provides a _____ of value
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measure
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money provides a _____of exchange
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medium
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one of the pillars of free enterprise is the _______system
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price
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private enterprise is based on __________
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voluntary exchange
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production
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creation of goods and services
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resource markets
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Where you exchange your labor for money to spend on goods and services
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circular flow
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the movement of money, products, and resources between households and businesses
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economic growth
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increased production of goods and services
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medium of exchange
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a function of money which enables people to make exchanges more easily with one another
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price system
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provides signals for what will be produced
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property right
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authority to use or trade a good or resource
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profit
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money remaining after deducting costs from sales.
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