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Economic Systems Guided NotesI. EconomicsA. Economics is ___________________________________________________________________________________B. Production = What businesses makeC. Consumption = _________________________________________________D. Distribution = Who is rich and who is poor. II. Free Market and Command EconomiesA. Free Market Economy = An economic system in which ____________________________________________________________________ between privately owned businesses.B. Command Economy = An economic system in which __________________________________________________are determined centrally by the government.III. Free Market System: CapitalismA. Ideas first proposed by ___________________________________B. “Economic Individualism”IV. Principles of Free Market SystemA. Principle 1: Economic FreedomIn a world with limited resources…- ___________________________________________________- Producers can decide what they want to make- Workers can decide ___________________________________B. Principle 2: Private Property1. Individuals can own land and means of production (Examples: ____________________________________________________)2. Individuals can choose how to use their property- _______________________________________C. Principle 3: Self-Interest Drives Society__________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________1. People will make decisions that benefit themselves…But that is OKAY!2. If people make a product that people want, _______________________________________________________. Everyone Wins!D. Principle 4: Competition is Good1. When businesses compete, _______________________- Lower Prices- Inventive/New Ideas- Progress!E. Principle 5: Prices are Determined by the Market1. Prices of goods and services are _________________________________________________2. “______________________” guides market – limited govt.F. Limited Government1. Government makes laws to ________________________________________________2. Individuals make economic decisions.3. Does not have influence over the market.- “___________________________________” or “Let the people do as they please”V. Command Economy: SocialismA. _____________________________means of productionB. Critical of wealth in the hands of the few - _________________________VI. Rise of SocialismA. Had roots in the Industrial Revolution… Why might this have happened? VII. Principles of a Command EconomyA. Principle 1: Economic Control1. In a world with limited resources….____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________- The government should control the distribution of resources of ensure that society is ____________________________________________________- Generally follows a Central Plan for the futureB. Principle 2: State Owned Property1. The government may own or influence the property and the means of production and business.2. Independent businesses may still exist, but they _____________________________________C. Principle 3: Social Needs Drive the Economy1. The government determines _______________________________________________________________ and tells businesses what and how much to make.D. Principle 4: Cooperation is Good1. Progress occurs when community cooperates and limits competition2. This helps __________________________________________E. Principle 5: Government Sets Prices1. The government _____________________________________F. Principle 6: Large Government1. The government makes laws to help carry out ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ................
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