Chap02 - Chapter 2 The Market System and the Circular Flow...

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The Market System and the Circular Flow Chapter 2
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Chapter Objectives • Economic systems • Market system characteristics • Market system questions –what, how, and who • Change and progress in the market system • The circular flow model 2-2
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Economic Systems • Set of institutional arrangements • Coordinating mechanism • Differ based on : –Who owns the factors of production –What method directs economic activity 2-3
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Economic Systems • The market system –Private ownership –Markets • The command system –Government ownership –Central planning board 2-4
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Index of Economic Freedom Free Mostly Free Mostly Unfree Repressed 1- Hong Kong 3- Ireland 5- United States 20- Belgium 31- Spain 48- France 101- Brazil 126- China 134- Russia 148- Venezuela 156- Cuba 157- North Korea Source: Heritage Foundation ( www.heritagefoundation.com ) and The Wall Street Journal Ranking of 157 countries for 2008 2-5
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Market System Characteristics • Private property • Freedom of enterprise and choice • Self-interest • Competition • Markets and prices 2-6
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This note was uploaded on 01/30/2011 for the course ECO 218 taught by Professor Dr.rhibidaoud during the Winter '10 term at Sinclair CC.

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Chap02 - Chapter 2 The Market System and the Circular Flow...

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