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I. Economic Systems 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). Which economic system has the most government control?A command economy is characterized by the most government control over the economy.
Which economic system allows the government to own all the factors of production?The command economy, also known as a planned economy, requires that a nation's central government own and control the means of production.
Which type of economy is one in which the government owns all of the factors of production and decide what is produced?Under a command economy, governments own the factors of production such as land, capital, and resources, and officials determine when, where, and how much is produced. This is also sometimes referred to as a planned economy.
Which economic system has the government as the major owner of the means of production?Socialism is an economic and political system based on collective ownership of the means of production. All legal production and distribution decisions are made by the government in a socialist system.
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