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Unformatted text preview: ure capitalistic market system has no governmental
checks and balances in place and functions much like
nature. The system rewards the most efficient
resource users and the process becomes economic
survival of the fittest. It is the concept of economic
survival of the fittest that brings much of the natural
efficiency to the capitalistic economic system.
2 Chapter Learning Objectives
In this chapter you will learn:
1. The difference between a command system and a
market system. 2. The main characteristics of the market system. 3. How the market system decides what to produce,
how to produce it, and who obtains it. 4. How the market system adjusts to change and
promotes progress. 5. The mechanics of the circular flow model.
Chapter 2 2 1 Chapter 2: The Market System and The Circular Flow
3 Each social system must address the issue of deciding
how to use scarce resources to produce goods and
services, determine how to distribute these goods and
services among the members of their society, and
discern how to maintain enough flexibility in the system
to accommodate change and encourage increasing
efficiency over time. Economic Systems
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09