Economics Chapter 2: Economic Systems

3. Reducing productivity means that people do not get the material wealth that other society people have.

2 1. Explain the basic economy, what is capitalism, and the mechanism of free market. 2. Analyze trends in the mixed economy. 3. Explain the importance of the US economic system, including key economic indicators (especially GDP), productivity, economic cycle and so on. 4. Compare fiscal policy and monetary policy and explain the impact each will have on the economy. Compare capitalism, socialism, communism, and mixed market. Learning objectives Chapter 2 2-2 What is economics? Economics - Study ways society uses resources to produce goods and services among various groups and individuals. Macroeconomics - Focus on the management of the national economy as a whole. Microeconomics - Focus on the behavior of people and organizations in specific products or service markets. Economic headquarters LG 1 2-4

Understanding economics and its impact on business Chapter 02 McGraw-Hill / Irwin Copyright © 2013 McGraw-Hill Companies, Inc. All rights reserved.

Economic system (also called economic order) is the production, distribution and distribution system of products and services in society and specific areas. It includes a combination of institutions, institutions, subjects, decision-making processes, and consumption patterns that form the economic structure of a particular community. Therefore, the economic system is a social system. Manufacturing methods are related concepts. Every economic system has three basic questions. Production, production, production and production.

Economists generally recognize three different types of economic systems. These are 1) the command economy, 2) the market economy, and 3) the traditional economy. Each of these economies responds to three basic economic problems in different ways (production, production, production). In the market economy, consumers decide the answer to three questions. They do this by choosing what to buy. Do not tell anyone what to do to the company - they do what they think they will sell. If they choose the wrong one, they will go bankrupt. Most developed countries today are market economies. America, Japan, Germany are market economies