I. Economic Systems Show II. Capitalist Ideology A. Basic Characteristics:
B. private property
C. markets and prices
D. role of self interest
E. freedom of enterprise and choice
F. competition = capitalism
G. limited role for government
III. The Market System at Work A. The Market and the 5Es 1. Economic Growtha. Define B. Summary: 1. The move toward capitalism has resulted in high rates of ECONOMIC GROWTH in many countries. Profits, private property, and freedom of enterprise and choice promote growth A. Introduction 1. The five fundamental questions must be answered by all economic systems. B. What will be produced? (Allocative Efficiency) 1. In order to be profitable, businesses must respond to consumers' (individuals, other businesses, and the government) wants and desires. C. How will the goods and services be produced? (Productive Efficiency) 1. The market system encourages and rewards those producers who are achieving least-cost production. D. Who will get the output? (Equity) 1. determined by how the income is distributed E. How will the system accommodate change? 1. Markets are dynamic - what is efficient today may not be efficient tomorrow as tastes, technology, and resource supplies change. F. How will the system promote progress? 1. The market system promotes technological improvements and capital accumulation (economic growth). What economic system are decisions made by individuals?A market economy is an economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses.
What is an economic system where the decisions on what to produce and what to consume are made by individuals and businesses in the market?A true free market economy is an economy in which all resources are owned by individuals. The decisions about the allocation of those resources are made by individuals without government intervention.
Who decides what goods and services will be provided in a market economy?In a market economy, the wants of the consumers and the profit motive of the producers will decide what will be produced. A.K.A. Free-enterprise, Laisse- faire & capitalism. Labor (the workers) and management (the bosses/owners) together will determine how goods will be produced in a market economy.
What is called economic system?An economic system is a mechanism with the help of which the government plans and allocates accessible services, resources, and commodities across the country. Economic systems manage elements of production, combining wealth, labour, physical resources, and business people.
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