Traditional Economies traditional economy an economic system in which decisions

Traditional economies traditional economy an economic

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D. The Flow of Money and Goods in A Market Society circular flow model: a diagram that shows the circular movement of money, resources, and goods and services among households and producers in an economy household: a person or a group of people living together firm: an organization that uses resources to produce and sell goods or services; a business product market : a market in which firms sell goods and services to households factor market: a market in which households sell land, labor, and capital to firms factor payment : income earned when an individual sells or rents a factor of production that he or she owns; for example, wages are a factor payment made to workers in exchange for their labor The reason markets work so well is that one person's output always becomes another person's input E. Capitalism Gives Rise to Socialism and Communism Industrial Revolution: a period of rapid industrial growth and development during the 1700s and 1800s capitalist: an individual investor who accumulates capital, such as machinery, factories, and railroads capitalism: the free market economic system socialism: a political and economic philosophy based on collective or government ownership of a society’s resources and means of production, with the goal of achieving social and economic equality communism: a political and economic system in which all property and wealth is collectively owned by all members of society; the final stage of socialism in Marxist theory The term capitalism came to be synonymous with the free market economic system. Socialism is a political and economic philosophy that calls for property to be owned by society as a whole, rather than by individuals, for the equal benefit of all. The final phase of socialism, in the view of Marx and Engels, is communism , a political and economic system in which all property and wealth are owned by all members of society. F. Modern Command Economies: Decision Making by the State economic planning: the process by which economic decisions are made or influenced by central governments rather than by private individuals In the Soviet Union, private ownership of property was forbidden. The state owned the factors of production.
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  • Fall '16
  • Craig Zupi
  • Capitalism, Economic system, Planned economy

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