Chapter 2: Economic Systems and Decision Making

Chapter 2: Economic Systems and Decision Making

Economic System - __________________________________________________

__________________________________________________________________

Three types of Economic Systems:

1. Traditional Economies –

Advantages:

Disadvantages:

2. Command Economies –

Advantages:

Disadvantages:

3. Market Economies –

Advantages:

Disadvantages

The United States has a __________________ economy.

Advantages:

Disadvantages:

Capitalism and Free Enterprise

A market economy is normally based on a system of ____________________, where private citizens, many of which are entrepreneurs, own the factors of production.

Another term used to describe the American economy is ___________________, in which competition is allowed to flourish with a minimum amount of government interference.

Five Important Characteristics:

1. Economic Freedom –

2. Voluntary Exchange –

3. Private Property Rights –

4. Profit Motive –

5. Competition -

The Role of the Entrepreneur

The Role of the Consumer

_____________________________ describes the role of the consumer as ruler of the market

The Role of Government

Protector –

Provider and Consumer –

Regulator –

Promoter of National Goals -