Ec 2 Economic Systems Vocabulary
| A | B |
|---|---|
| traditional economic system | economic decisions are based on customs, beliefs, and ways of doing things that have been handed down from generation to generation |
| command economic system | the government controls the factors of production and makes all the decisions about their use |
What are economic decisions are based on?
In a market economy, economic decision-making happens through markets. Market economies are based on private enterprise: the means of production (resources and businesses) are owned and operated by private individuals or groups of private individuals. Businesses supply goods and services based on demand.
What kind of economy is based on cultures and customs?
A traditional economy is an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rule and manner of their distribution. Countries that use this type of economic system are often rural and farm-based.
Which is the most traditional type of economy?
The traditional economic system is the most traditional and ancient types of economies in the world. Vast portions of the world still function under a traditional economic system. These areas tend to be rural, second- or third-world, and closely tied to the land, usually through farming.
What are the drivers of a traditional economy?
Traditional economies often develop over centuries, relying on the same time-proven economic drivers, like agriculture, fishing, hunting and trading that a community’s ancestors used centuries ago.
Which is the oldest form of economic system?
The capitalist or free enterprise economy is the oldest form of economy. Earlier economists supported the policy of ‘laissez fair meaning leave free. ’ They advocated minimum government intervention in the economic activities. The following are the main features of a capitalist economy; (i) Private property
