Flashcards-The Dynamics of Free Enterprise

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What is the ownership structure in a free enterprise system?

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Resources are predominantly privately owned, allowing individuals and businesses to control the means of production and distribution.

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What distinguishes free enterprise from other economic systems?

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The private ownership of resources, empowering individuals to make decisions based on their interests and market demands.

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What role does competition play in free enterprise?

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Competition is a cornerstone, encouraging businesses to improve products and services, driving efficiency and innovation.

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What is the role of government in a free enterprise system?

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The government's role is limited to ensuring fair play and protecting property rights, with minimal intervention.

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How are free enterprise and capitalism similar and different?

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Both emphasize private ownership and market competition, but free enterprise focuses on economic freedom, while capitalism emphasizes capital accumulation.

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How are prices determined in a free enterprise system?

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Prices are determined by the interaction between buyers and sellers, reflecting the value of goods and services through supply and demand.

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What role do entrepreneurs play in a free enterprise economy?

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Entrepreneurs are innovators who bring new ideas and products to the market, contributing to economic development and job creation.

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What are some challenges of free enterprise?

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Challenges include market failures, monopolies, and income inequality, which may require government intervention to correct.

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What is essential for sustaining a healthy economy in a free enterprise system?

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Finding the right balance between freedom and regulation is crucial for sustaining a healthy economy.

Front

What is the impact of consumer choice in a free enterprise system?

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Consumer choice drives demand, influencing what products and services are offered, and encourages businesses to innovate and improve quality.