Economic Systems Guided Notes

Economic Systems Guided Notes ______I. Economics ______A. Economics is ______B. Production = What businesses make ______C. Consumption = ______D. Distribution = Who is rich and who is ______poor. ______II. Free Market and Command Economies ______A. Free Market Economy = An economic ______system in which ______between privately ______owned businesses. ______B. Command Economy = An economic ______system in which ______are determined centrally by the ______government. ______III. Free Market System: Capitalism ______A. Ideas first proposed by ______B. “Economic Individualism” ______IV. Principles of Free Market System ______A. Principle 1: Economic Freedom ______In a world with limited resources… ______- ______- Producers can decide what they ______want to make ______- Workers can decide ______B. Principle 2: Private Property ______1. Individuals can own land and ______means of production (Examples: ______) ______2. Individuals can choose how to ______use their property ______- ______C. Principle 3: Self-Interest Drives ______Society ______1. People will make decisions ______that benefit themselves…But that ______is OKAY! ______2. If people make a product that ______people want, ______. Everyone Wins! ______D. Principle 4: Competition is Good ______1. When businesses compete, ______- Lower Prices ______- Inventive/New Ideas ______- Progress! ______E. Principle 5: Prices are Determined by ______the Market ______1. Prices of goods and services ______are ______2. “______” ______guides market – limited govt. ______F. Limited Government ______1. Government makes laws to ______2. Individuals make economic ______decisions. ______3. Does not have influence over ______the market. ______- “______” or ______“Let the people do as they ______please” ______V. Command Economy: Socialism ______A. ______means of production ______B. Critical of wealth in the hands of the ______few ______- ______VI. Rise of Socialism ______A. Had roots in the Industrial ______Revolution… Why might this have ______happened?  ______VII. Principles of a Command Economy ______A. Principle 1: Economic Control ______1. In a world with limited ______resources…. ______- The government should ______control the distribution of ______resources of ensure that ______society is ______- Generally follows a ______Central Plan for the future ______B. Principle 2: State Owned Property ______1. The government may own or ______influence the property and the ______means of production and ______business. ______2. Independent businesses may ______still exist, but they ______C. Principle 3: Social Needs Drive the ______Economy ______1. The government determines ______and tells ______businesses what and how much ______to make. ______D. Principle 4: Cooperation is Good ______1. Progress occurs when ______community cooperates and limits ______competition ______2. This helps ______E. Principle 5: Government Sets Prices ______1. The government ______F. Principle 6: Large Government ______1. The government makes laws ______to help carry out ______