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Chapter2WorksheetHonors(right one).docx - Chapter 2...

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Chapter 2 “Economic Systems & Tools”Name:_________________Prd:_____2.1Key Terms:Economic system- the setof mechanisms andinstitutions that resolvesthe what and for whomquestions.Pure market economy-private firms account forall production of goods.Pure command economy-all resources aregovernment owned andgovernment officialscoordinate productionMixed economy- a mix ofcentral planning withcompetitive marketsMarket economy- aneconomy where marketsplay a large roleTransitional economy-the process of shiftingfrom command economiesto market economiesTraditional economy-shaped largely by customor religionThinking Critically:1.What did Adam Smith mean when he talked about an “invisible hand” that guidesproduction in market economies?
2.Why are property rights important to the efficient working of a market economy?
3.What problems are likely to occur in command economies?
4.Why is the U.S. economic system sometimes called a “mixed market economy”?
5.What economic change is taking place in a transitional economy?
Chapter 2 “Economic Systems & Tools”Name:_________________Prd:_____
6.In what sense are there traditional components in all types of economies, not justtraditional economies? Provide examples.

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Term
Spring
Professor
N/A
Tags
Economic system, Planned economy, pies

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