IEM Economics (2nd Edition) Unit 1, Lesson 3 - Traditional and Command
Select FIVE characteristics of a command economy. 1. There is an equal distribution of wealth. 2. Individuals and businesses may own property 3. There is no private property or private business. there is limited availability of goods. 4. There is limited availability of goods. 5. A wide variety of goods are available based on demand. 6. The government exercises little control over the economy. 7. The government makes all economic decisions. 8. The government is typically a democracy. 9. There is a totalitarian form of government.
1. There is an equal distribution of wealth. 3. There is no private property or private business. there is limited availability of goods. 4. There is limited availability of goods. 7. The government makes all economic decisions. 9. There is a totalitarian form of government.
Describe Karl Marx and Friedrich Engels' three main points in the Communist Manifesto. 1. Communism is inherently more profitable than capitalism. 2. Capitalism was the 19th-century invention of democratic governments meant to enslave people. 3. Capitalism features exploitation of workers (proletariat) by the owners. 4. Communism is a system of peace. 5. There are inherent flaws in capitalism. 6. World history is defined by class struggle.
3. Capitalism features exploitation of workers (proletariat) by the owners. 5. There are inherent flaws in capitalism. 6. World history is defined by class struggle.
Afghanistan has a traditional economic system.
F - False
Growing crops for profit is known as subsistence farming.
F - False
Subsistence Farming
Farming that is done simply to feed the family of the grower and not to sell goods for a profit.
Communism
Form of government that stemmed from the economic ideas of Karl Marx and preaches the idea that all citizens should be equal in wealth and status.
TRUE or FALSE Bartering is a method of acquiring goods through trading that is typical of traditional economies.
T - True
____ is a pamphlet of communist economic thinking that highlights the need for a new type of government and economy.
The Communist Manifesto
Traditional Economic System
The system under which people within a community perform the same economic functions as their forefathers and ancestors.
Barter System
The trading of one item to receive another item; creates a double coincidence of wants.
__________ detailed the flaws of capitalism and how it could eventually end with a worker operated government with no social classes.
Das Kapital
Bartering is made easier through a double coincidence of wants.
T - True
Select FOUR reasons why lack of incentive is one reason for the failure of communism. 1. Workers are unable to switch jobs. 2. Prices on essential items are too high. 3. It hampers incentive and improvements. 4. It is illegal to own property or business. 5. Workers are not allowed to get an education. 6. The type of government normally associated with communism does not allow for personal freedom. 7. It often results in a lack of available goods. 8. It results in too many holidays and vacation days.
3. It hampers incentive and improvements. 4. It is illegal to own property or business. 6. The type of government normally associated with communism does not allow for personal freedom. 7. It often results in a lack of available goods.
Proletariat
A French word that explains the working class as written by Karl Marx and Friedrich Engels.
Totalitarian
A centralized government with near-complete control over the lives of citizens.
Which of these scenarios best represents a traditional economic system?
An Amish family sells the furniture they have made for generations.
Command Economy
An economy in which all decisions are made by the government with little to no input by the people.
Who are the two German philosophers who wrote Das Kapital and the Communist Manifesto?
Karl Marx and Friedrich Engels
Double Coincidence of Wants
Requires that, in a transaction, people have something the other wants and are willing to give it up for that other item.