McConnell_Brue_Chapter02

Once we can clarify these points we will also be able

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Unformatted text preview: e points, we will also be able to see how amazing a market system truly is. • Who owns the factors of production. • The method used to motivate, coordinate, and direct economic activity. Chapter 2 4 Learning Objective 2-1 2 Chapter 2: The Market System and The Circular Flow Slide 5 Two general types of economic systems exist today: command systems and market systems. • Historically, command systems have been associated with sot or communist political systems. • Alternatively, a market-based approach typically referred to as capitalism has historically been most commonly associated with democratic political systems. What types of economic systems exist? Command economic systems known as som or communism. Market systems known as capitalism. Chapter 2 5 Learning Objective 2-1 Slide 6 Command Economic Systems In command economic systems the government owns most of the property and controls decision making when seeking to answer the economic questions of what to produce, what to use to produce it, and who gets it, etc. These decisions occur thr...
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