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). Which theory of economics believes that the economy performs best when there is little to no interference from government?laissez-faire, (French: “allow to do”) policy of minimum governmental interference in the economic affairs of individuals and society.
Which theory of economics believes government is not only helpful but necessary in a successful economy?Which theory of economics believes government is not only helpful, but necessary in a successful economy? The Keynesian model of economic theory has a clear explanation for the gap between the rich and the poor.
What is Keynesian economics quizlet?keynesian economics. a form of demand-side economics that encourages government action to increase and decrease demand and output. demand side economics. the idea that government spending and tax cuts help an economy by raising demand.
What is the Keynesian view quizlet?Keynesian Economists believe that a recession occurs when aggregate demand, or consumer spending, declines in the marketplace. Keynesian Economists believe that the government should increase spending so as to turn around any market downturn and help generate jobs.
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