Economics Guided Notes Chapter 2 Economic Systems Guided Notes Chapter 2 – Economic Systems and Decision…

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<ul><li><p>Economics Guided Notes Chapter 2 Economic Systems and Decision Making </p><p> Section 1: Economic Systems Introduction </p><p> The survival of any society depends on its ability to _____________________________________________________ ___________________________________________________________. </p><p> Because _________________________________________________, decisions concerning WHAT, HOW, and FOR WHOM to produce must be made. </p><p> All societies have an economy, or economic system__________________________________________________ ________________________________________________________________________________________________________________. </p><p> The way in which these provisions are made determines _______________________________________________ ____________________________________________________________. </p><p> Three major kinds of economic systems exist___________________________________________________________. Most ____________________________________________________________________________ with one of these systems. </p><p> Traditional Economies </p><p> In a ___________________________________ economy, _____________________________________________________________ defined by custom. </p><p> Examples include the central ______________________________________________________________________________ ______________________________________________________. </p><p> The advantages of a traditional economy is that __________________________________________________________ and there is little uncertainty about _______________________________________________________________________ ___________________________________________. </p><p> A disadvantage of a traditional economy is the ___________________________________________________________ ________________________________________. This leads to a ______________________________________________________ than in other societies. </p><p> Command Economies </p><p> In a command economy, a __________________________________________________________________________ WHAT, HOW, and FOR WHOM to produce. </p><p> Command economies include ______________________________________________________________________________ _________________________________________________________. </p><p> There are two advantages to a command economy: _____________________________________________________ _________________________________________________________________________________________________________________________________________________________________________________________________________________________________. </p><p> There are several disadvantages to a command economy: consumer needs __________________________ ________________________; ______________________________ is not rewarded; the necessary ____________________ _______________________________________________________; little flexibility to ___________________________________ _____________________________; and individual _________________________________________________________________. </p><p> Market Economies </p><p> In a market economy, _______________________________________________________________________ WHAT, HOW, and FOR WHOM to produce. In each market transaction, the ___________________________________________ _______________________________ ensuring that _________________________________________________________________ the goods and services that consumers want to buy. </p><p> Examples include the _______________________________________________________________________________________ ________________________________________________________________________________________________________________. </p></li><li><p> There are numerous advantages to a market economy: the ability to _________________________________; the high _________________________________________; the small _________________________________________________; the ability __________________________________________________; the _____________________________________________ created; and the high degree ___________________________________________________. </p><p> Disadvantages to a market economy include _____________________________________________________________ _________________________________________. Markets also do an inadequate job of ___________________________ ________________________________________________________________________________________________________________. Citizens of a market economy must also __________________________________________________________________ ________________________________________________________________________________________________________________. </p><p>Figure 2.1Comparing Economic SystemsFigure 2.1Comparing Economic Systems</p></li><li><p>Economics Guided Notes Chapter 2 Economic Systems and Decision Making </p><p> Section 2: Evaluating Economic Performance Introduction </p><p> Every economic system has goals such as ________________________________________________________________ ________________________________________________________________________________________________________________. </p><p> Goals are important because _______________________________________________________________________________ ________________________________________________________________________________________________________________. </p><p> If the system falls short, then we may demand ___________________________________________________________ _______________________________________________________. </p><p> Economic and Social Goals </p><p> Economic freedom, or the __________________________________________________________________________________ ____________________________________, is a goal highly valued in the United States. </p><p> Economic efficiency means that resources _______________________________________ and that the _________ ________________________________________________________________________________________________________________. </p><p> Economic equity is the social goal that explains __________________________________________________________ ______________________________________________________. </p><p> Economic security is a social goal that results in _________________________________________________________ ________________________________________________________________________________________________________________. </p><p> Most economic systems strive for full employment, or __________________________________________________ ______________________________________________________. </p><p> Price stability, or _____________________________________________, is important to anyone trying to provide basic necessities ___________________________________________ and for anyone _______________________________ ________________________________________________. </p><p> Economic growth is an important goal because __________________________________________________________ and existing populations ___________________________________________________________________________________. </p><p> Trade-Offs Among Goals </p><p> When goals are at odds, ____________________________________________________________________________________ ________________________________________________. </p><p> Most of the time, ____________________________________________________________________________________________ ________________________________________________________________________________________________________________. </p><p> The flexibility of the American _____________________________________________________________________________ ________________________________________________. </p></li><li><p>Economics Guided Notes Chapter 2 Economic Systems and Decision Making </p><p> Section 3: Capitalism and Economic Freedom Introduction </p><p> A market economy is normally based on a system of capitalism, ______________________________________ ________________________________________________________________________________________________________________. </p><p> Free enterprise is another term used ____________________________________________________________________. In a free enterprise economy, ______________________________________________________________________________ </p><p>______________________________________________________. Competition and Free Enterprise </p><p> Capitalism is a market economy in which __________________________________________________________________, in a free enterprise system, there is ________________________________________________________ and businesses are _________________________________. </p><p> With economic freedom, people and businesses _________________________________________________________. The result of voluntary exchange, in which buyers and sellers are _____________________________________ </p><p>______________________________________________, results in both buyers and sellers believing that the good or service obtained __________________________________________________________________________________________. </p><p> Private property rights _____________________________________________________. Any rewards _______________ __________________________________________________. </p><p> The profit motive _______________________________________________ and is largely responsible for __________ ________________________________________________________________________________________________________________. </p><p> Competition among sellers _________________________________________________________________________________. The Role of the Entrepreneur </p><p> Entrepreneurs use _______________________________________________________________________ to make a profit. When an entrepreneur is successful, ___________________________________________________. Successful </p><p>entrepreneurs _______________________________________________________________________________________________. The entrepreneurs search for profits ____________________________________________________________, greater </p><p>_________________________________, more _______________________________, higher _______________________________, and __________________________________ for consumers. </p><p> The Role of the Consumer </p><p> The __________________________________ in a free market economy. __________________________________________ describes the role of the consumer as ruler of the market. </p><p> Consumers in the American economy express their wants ______________________________________________ __________________________. The dollars they spend are the votes ________________________________________ ________________________________________. </p><p> The Role of the Government </p><p> As a protector, a _____________________________________________________________________________________________ meant to prevent ____________________________________________________________________________________________. </p><p> Governments are both __________________________________________________. The U.S. government provides education and welfare and is the second largest consuming group in the economy after consumers. </p><p> As a regulator, the government ____________________________________________________________________________. The promoting of national goals is an important role of any government. In the United States, </p><p>achieving economic equity and security has ______________________________________________________________ ________________________________________________________________________________________________________________. </p></li></ul>

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