Macroeconomics Chapter 2 Term

actress9098's version from 2015-09-11 04:11

Section 1

Question Answer
Economic SystemA system of the production and distribution of goods and services. Also the allocation of resources
Command SystemThe government, society, owns everything (socialism)
Market SystemIndividuals own and deal with money for themselves (capitalism)
Medium of ExchangeAn object both buyers and sellers will accept as payment, used to make trade easier
MoneyAn invention to facilitate the exchanges of goods and services (a medium of exchange)
Consumer SovereigntyConsumers are in command, VIPs

Section 2

Question Answer
Dollar VoteYou cast one when you buy, by your purchase you are saying, "I like and want this product"
Creative DestructionThe creation of new technology and goods puts outdated goods out of business
Invisible HandOur own self-interest drives the economy forwar
Circular Flow DiagramShows the flow of money and products without a government
Product MarketWhere goods and services are brought and sol
Resource (factor) MarketHouseholds selling resources to businesses