OVERVIEW OF THE U.S. ECONOMYMiss Smith

7th Grade Civics

*pgs. 556-560 (21.1)

BASIC ECONOMIC SYSTEMS

The U.S. is considered a capitalist country because we have some government involvement

THE FREE-ENTERPRISE SYSTEMThe U.S. has a free-enterprise economic systemCan own private property and use their own ideas to make money

Consumer- person who buys goods or services

Producer- person or company that provides goods or services

CIRCULAR-FLOW MODEL

Diagram demonstrating how consumers, producers, and the government exchange resources, products, and money payments

Consists of goods, services, and resources moving in one direction and money moving in the opposite direction

PRICES AND SUPPLY AND DEMANDThe quantity demanded is the amount of a good and service that consumers are willing to buy at various possible prices

When prices go up, demand drops. When prices drop, demand goes up

Supply is the quantity of goods and services that producers are willing to offer at various possible prices

COMPETITION

Economic rivalry among businesses selling similar products

VENTURE CAPITAL

Investing directly in starting new businesses

INVESTMENT IN TECHNOLOGYBrings new products to the marketEncourages people to invest in a company’s stock