Economic Systems Flashcards
Grade 10 · Social Studies · Flashcards
12 key terms for understanding capitalism, socialism, and how economies are organized.
Flashcards
- Capitalism
- Economic system based on private ownership, profit motive, and free market competition.
- Socialism
- Economic system advocating collective/state ownership of production to distribute wealth more equitably.
- Communism
- Marxist end-goal: a classless, stateless society where all property is collectively owned and each person contributes and receives according to need.
- Mixed Economy
- System combining private markets with government regulation and social programs; used by most modern nations.
- Command Economy
- Government plans all production, prices, and distribution centrally; associated with Soviet-style communism.
- Supply and Demand
- Economic law that prices rise when demand exceeds supply and fall when supply exceeds demand.
- Means of Production
- Resources needed to produce goods: factories, machinery, raw materials, land. Ownership is the key distinction between capitalism and socialism.
- Welfare State
- Government system guaranteeing citizens basic services (healthcare, education, housing) funded by progressive taxation.
- Market Failure
- When free markets produce inefficient or unfair outcomes, justifying government intervention.
- Redistribution
- Government policy of taxing higher incomes and transferring resources to lower-income citizens through social programs.
- Democratic Socialism
- Combination of socialist economic policies with democratic political systems; practiced in Scandinavian countries.
- GDP (Gross Domestic Product)
- Total monetary value of all goods and services produced in a country in a year; primary measure of economic size.
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