Title.
The Awesome Chapter 2 Summary What is Economics? Nic Hart
Chris Hughes Mr. Treadway |Period 3 Overview Chapter 2, titled Economic Systems and the Global Economy, focuses on free enterprise and socialism, the two most important economic systems.
Key Terms
1. How does socialism and capitalism answer the three economic questions? Is America a pure capitalist nation? Is this good or bad? Explain.
When the government controls what products are going to be made, how to make them, and who gets them it is a socialist economy. In capitalism individuals and private groups make the products and decides how much rationing device to trade them for. America is a mixed economy. A mixed economy consists of socialism and capitilism. This mixed economy is a good thing because the people can own companies and produce goods, although there government restrictions on pricing of products, who can buy the products, and what products can be sold.
2.Describe the Keynesian school of economics and the impact it has had on American economic Polic
Chris Hughes Mr. Treadway |Period 3 Overview Chapter 2, titled Economic Systems and the Global Economy, focuses on free enterprise and socialism, the two most important economic systems.
Key Terms
- Economic System- The way in which a society decides what goods to produce, how to produce them, and for whom goods will be produced.
- Free Enterprise- An economic system in which individuals (not government) own most, if not all, the resources and control their use. Government plays only a small part in the economy.
- Socialism- An economic system in which government controls and may own many of the resources.
- Economic Plans- A government program specifying economic activities, such as what goods to produce, how to produce them, and for whom goods willbe produced.
- Income Distribution- The way all the income earned in a country is divided among different groups of income earners.
- Mixed Economy- An economy that is neither purely socialist; and economy that has some elements of both capitalism and socialism. Most countries in the world have mixed economies.
- Traditional Economy- An economic system in which the answers to the three economic questions are based on customs, traditions, and cultural beliefs.
- Vision- A sense of how the world works.
- Labor Theory of Value- the belief that all value in produced goods is derived from labor
- Surplus Value- the difference between the total value of production and the subsistence wages paid to workers.
- Globalization- a phenomenon by which economic agents in any given part of the world are affected by events elsewhere in the world; the growing integration of the national economies of the world to the degree that we may be witnessing the emergence and operation of a single worldwide economy.
- Offshoring- the term used to describe work done for a company by persons other than the original company's employees in a country other than the one in which the company is located.
1. How does socialism and capitalism answer the three economic questions? Is America a pure capitalist nation? Is this good or bad? Explain.
When the government controls what products are going to be made, how to make them, and who gets them it is a socialist economy. In capitalism individuals and private groups make the products and decides how much rationing device to trade them for. America is a mixed economy. A mixed economy consists of socialism and capitilism. This mixed economy is a good thing because the people can own companies and produce goods, although there government restrictions on pricing of products, who can buy the products, and what products can be sold.
2.Describe the Keynesian school of economics and the impact it has had on American economic Polic
