Economic Terms

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Economic decisions are based on customs and beliefs of the past; Uses bartering to exchange goods

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Traditional Economy

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Government makes all economic decisions

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Command Economy

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Private businesses & individuals make all economic decisions without government interference; Works on supply & demand; U.S. is close to being pure in this economy

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Market Economy

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What type of economic system do most democratic nations have?

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Mixed Economy

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Changing from one type of currency to another in order to purchase goods across the world market

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currency exchange

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Measures a country’s economy; All of the goods and services produced within a country in 1 year

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Gross Domestic Product (GDP)

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Education, healthcare, & training of a country’s workers

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human capital

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Technology, factories, & machines that are used to make/sell goods & services

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capital goods

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“Gifts” of nature

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natural resources

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Someone who takes a risk and starts a new business or invents a new product

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Entrepreneurship