seemann3 - Test 3 Economies Barter System - a system in...

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Test 3 Economies Barter System - a system in which someone trades something for something else - difficult to create surplus Money Economies - gold/silver/etc. is used as a standardized mode of currency - currency is used to pay for something Command Economies - government controls large aspects of economic activity - Feudalism - serfs work on master’s landholdings - common in medieval and early modern Europe - Mercantilism - nation regulates manufacturing and trading activity - give incentives to those who manufacture certain products - see colonies as a tool to enrich the mother country - faded out after the 18 th century - Socialism - based on Karl Marx’s theory of economic determinism - for Marx, the economic system of any society determines the shape of all other parts of society - he also coined the term historical materialism, which designated every epoch of human history could be designated by the dominance of certain economic system - a change in this system represented an upheaval in the whole of society - theorized that the workers had to sell their labor to the owners of the means of production for less than it is worth - Marx theorized this capitalist system would eventually break down and be replaced, but a transitional government had to preside over the transfer to communism - Marx, however, could not foresee the developlement of trade unions, government regulation of the labor market, or the growth of the middle class - replaces capital elite with government elite - need for massive bureaucrats Communism Free Market Capitalism - based on law of supply and demand and the belief that private prosperity will result in the public good - by far the most efficient system for producing goods - does create a large amount of inequality and poverty in society - there is always a tendency towards monopoly and oligopoly Command economies government controls large aspects of economic activity Sectors of the Economy Primary Sector - the sector which concerns the extraction of raw materials - fishing, mining, etc.
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Secondary Sector - the sector which involves the manufacturing of said raw materials - poultry plant, etc. - this sector has shrank since the 1950s Tertiary Sector - the sector which deals with providing services for other people - grocery store where poultry is sold, - involve government officials, doctors, lawyers, professionals, sales clerks, janitors, etc. - currently the largest sector in the American economy Informal/Underground/ Shadow Sector - completely unregulated sector of the economy - involves illegal behaviors and services, such as drugs, prostitution, etc. - also contains industry that would be legal if regulated Education Education system in America - Historically, formal education was for the wealthy - today, education is provided at taxpayer’s expense The Nature of Goods and Services Private Goods - goods that are paid for directly by the individual user Public Goods - goods that are either paid for indirectly or are available to everyone - Joint Consumption Goods
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This note was uploaded on 10/19/2011 for the course SOCL 2001 taught by Professor Mecom during the Fall '07 term at LSU.

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seemann3 - Test 3 Economies Barter System - a system in...

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