Ch 2 Economic Systems Part 2

How do we use the circular flow model?

In a command economy it is the government that controls the factors of produciton

How does the market correct itself with laissez faire in place?

Collectives were seen in Soviet Agriculture as part of Stalin's 5 year plans

What is a collective?

Even with a command economy in Soviet Union, consumers still experienced opportunity cost

What are some problems faced in a command economy?

Laissez faire is the doctrine that government should take a hands off approach in the market

Private Property is property owned by individuals or companies not by the government

Centrally planned economy is different from a command economy

Joseph Stalin was one of the most well known authoritarian dictators of the twentieth century.

What is communisim

What does it mean to be authoritarian?

What does privatization involve?

The banking system operates with very little restrictions globally

Examples of private property

What is heavy industry?

There is no single economy that has all the answers for the three economic questions.

Who invented the term laissez faire?

Communist countries can often times have an authoritarin government in place such was the case with former Soviet Union

What is socialism?

Most nations that had a command economy are currently in transition such as in mainland China