EC101sOutlines03ExchangeMoneyPrices

EC101sOutlines03ExchangeMoneyPrices - EC101 BB...

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Unformatted text preview: EC101 BB & EE / Manove Lecture 3: Free Markets, Exchange, Money & Prices Exchange, Money & Prices Market System>Money p 1 EC101 BB & EE / Manove Free-Market System Now the worlds most common economic system. Production voluntary activity of private firms. Distribution voluntary exchange Free-Market System p 2 EC101 BB & EE / Manove Free Market Example Example: Shanus Pizza Palace Shanu decides to open a pizza restauran restaurant. Free-Market System>Example p 3 EC101 BB & EE / Manove The Free-Market Model The pure free-market system is a model . Real free-market economies always deviate from the model from the model. Free-Market System>Deviations p 4 EC101 BB & EE / Manove Example: Shanus Pizza Palace (again) Not Strictly Free Free-Market System>Deviations p 5 EC101 BB & EE / Manove Countries with Free-Market Economies Most national economies nowadays are free- market economies. Most firms in free-market economies are privately owned but publically owned firms are common as well. Free-Market System>Countries p 6 EC101 BB & EE / Manove Strictly Free Markets Even in the US, governments own many firms. Free-Market System>Countries p 7 EC101 BB & EE / Manove Free-Market Model and EC 101 In EC101 we spend a lot of time studying the pure free-market model, but we also study how real economies deviate from the free-market model deviate from the free market model. Free-Market System>EC101 p 8 EC101 BB & EE / Manove Voluntary Exchange In free-market economies, voluntary exchange is used to distribute outputs and inputs distribute outputs and inputs....
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This note was uploaded on 12/11/2010 for the course ECON 101 taught by Professor Idson during the Fall '08 term at BU.

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EC101sOutlines03ExchangeMoneyPrices - EC101 BB...

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