Economy

What is an economy?

• It describes how a country manages it's money and resources

• How one country pays the other

• How a country protects it's citizens

Define a traditional economy

• The government has full control of the financial structure.

• Consumers and Producers make the decisions.

• Based on family custom and tradition. No money is exchanged. People trade.

Who makes the decision in a Market Economy?

• Government makes all the decisions

• Consumers and Producers

• People trade goods one for another.

Define a command economy

• Producers and Consumers

• Supply and Demand

• Government tells what to produce, how to produce and for whom to produce. Government makes are the decisions financially.

Which choice best explains a mixed economy?

• Government has all the control

• Combination of Market and Command Economy

• People trade

How are prices determined?

• Parent or Guardian

• Supply and Demand

• The country determines the prices of items

Would a country rather have more imports or exports?

• Imports because the country will spend more money on items they need.

• Exports because the country will make more money from production.

What is the Invisible Hand in a Market Economy?

• system accepts private property and permits economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.

• an economic system in which production and prices are determined by unrestricted competition between privately owned businesses.

• a metaphor describing the unintended greater social benefits and public good brought about by individuals acting in their own self interests

• None of the above

All economic decisions are based on custom and habit from the past

• Command Economy

• Market Economy

• Traditional Economy

• Mixed Economy

Which economy is typically the best to live in?

• traditional

• command

• market

• mixed