Economies
Economy is. . .
• The production, distribution, trade and consumption of GOODS and SERVICES.
• A market is where goods and services are bought, sold or traded.
• A Free Market Economy is an economic system where merchants and consumers can buy, sell or trade FREELY.
• The United States has a free market economy system.
A consumer is. . .
• Any person or company who buys or trades for goods or services.
Government does NOT have money. . .
• Governments must tax citizens in order to support their needs.
• Typically, the rich are taxed higher than the poor and then have the resources spread around (giving some of it to the poorer people.)
Socialistic economy
• Government controls some aspects of the economy.
• Takes money from the wealthy and redistributes it to the poor.
• Makes certain government controlled things available to everyone – education, health care, food, jobs and retirement.
Communist Economy
Supply and Demand• Supply – The amount of goods or services.
• Demand – What the consumer wants.
• Law of Supply – When supply increases, the price decreases.
• Law of Demand – When demand increases, the price increases.
Inflation and Deflation• Inflation – When the money supply
increases, so the VALUE of money decreases.
• Deflation – When the money supply decreases, so the VALUE of money increases.
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