Economy Test-7th Grade
Productive resources
Factors of production ( parts ) used to make or deliver of goods and services, Can be natural, capital or entrepreneurship.
Financial Capital Market
Financial institutions encourage individuals and businesses to saveand invest by offering interest on deposits use for loans borrowed by businesses
Institutions
Formal organizations, customary ways, controlling values, beliefs, and cultural traditions that shape and reflect how societies operate.
Controlling values
Freedom, efficiency, equity security, full employment, stability, growth
Natural Resources
Gifts of nature example, land, lumbar, animals, used to make goods and services.
How does the government fit into a model of circular flow
Government use tax revenues from individuals and businesses to provide public goods and services
Society
Group of people living in a particular place.
Resource market
Household so resources to businesses for income
Who buys and sells in the product market
Household use income to buy goods and services (products) produced by businesses
Economic institutions
Households, businesses, labor unions, money mints, regulating agencies.
Demand
The amount of a good or service that consumers are willing and able to buy at a certain price
Supply
The amount of a good or service that producers are willing and able to sell at a certain price
Economy
The production, exchange, and conception of scarce goods and services in a given area.
Choices
The selection of an item or action from a set of possible alternatives.
Economics
The study of how individuals and societies choose to use scarce productive resources to obtain goods and services.
Consumption
The use of goods and services to satisfy needs and wants.
Customary ways
Using money, dominance of men and certain occupations, observance of various holidays.
What three basic questions do economic system seek to answer
What will be produced, who will produce it, for whom will it be produced.
Equailibrium price
Where supply and demand are equal at prices
Cultural traditions
Worth ethic, religion
Production
Combining of human, natural, capital and entrepreneurship resources to make goods services; available resources and consumer preferences determine what is produced.
Economic system
A collection of institution (parts) that provide a framework for a societies economic decision-making.
Proprietorship
A form of business organization with one owner who takes all the risk it all the profits
Partnership
A form of business organization with two or more or owners who share the risk and the profits.
Entrepreneur
A person who takes a risk to produce and sell goods and services in a search of profit.
Services
Actions, work, that can be bought and sold.
Government institutions
Constitution, Congress, the president, the Supreme Court, federalism, rule of law, consent of the governed, and dependency.
Scarcity
All resources and get a limited which requires that choice to be made the inability to satisfy our wants and needs at the same time.
Market
Any structure that allows buyers and sellers to make exchanges
Financial capital resources
Anything in measurable and money, example money, loans, investment. (used to make or provide access to other goods and services.)
Financial institutions
Banks, savings and loans, credit unions
Capital goods
Buildings, tools, machinery and other manufacturers or constructed things used to produce or provide access to other goods and services
Producers
Individuals or groups who make goods and services to satisfy consumer's wants and needs.
Corporation
It's for a business organization that is authorized by law to act as a legal entity; Owners share the profits, owner liability is limited to the amount of their investment
Interest
Money paid regularly at a particular rate and exchange for the temporarily use of lent money
Deposit
Money place in a bank, usually to gain interest
Income
Money received through work or investment
Loan
Money that is lended to a borrower in exchange for interest
System
Parts that work together as a whole
Consumers
People who use goods and services to satisfy needs and wants.
Human resources
People, when they perform any activity for which another person will pay.
Goods
Physical products, items, that can be bought and sold
What kind of economy is the us
Primarily a free market economy, government is involved in small quantities, therefore it is a mixed economy
Legal institutions
Private ownership your property, rights protected by negotiated contracts that are enforceable by law
Circular flow model
Provides a simplified overview of how a market economy operates
Two characteristics of traditional economies
•Economic decisions I'm done custom and historical precedent. •children perform the same type of work as their parents and grandparents
Three characteristics of command economies
•central ownership (usually by gov. Of property/resources •centrally planned economy •lack of consumer choice
Three ways the government pays for the goods and services it provides
•fear borrowed funds •through tax revenue •through fees
Three Characteristics of mixed economies
•individuals and businesses owners, decision-makers, for the private sector •Government is owner decision-maker for the public sector •governments role is greater then in a free market economy and less than in a command economy
Six characteristics of free market economies
•private ownership of property/resources •Profit motive example wanting to make gains •Competition •consumer sovereignty example consumer preferences determine what is produced •individual choice •minimal government involvement in the economy
Three organizational structures businesses take
•proprietorship •partnership •Corporation