Ch 3 - Economic System

is a mechanism that allows buyers and sellers to exchange a good or service.

is an economic system where supply and demand determine prices.

impacts the invisible hand in the economy but they still have an important role to play in the economy.

spend their wages and profit to purchase the goods and services that the firms supply.

in the form of student loans, grants, etc after higher education is completed.

is a blend of government commands and capitalism to address the fundamental economic questions which arise.

one which the central government dictates what will or will not be produced.

Diagram that shows how households and firms are related by the exchange of resources and products.

free markets are unaffected by third parties who are uninvolved.

the economic system where supply and demand define the prices.

one which the central government dictates what will or will not be produced

they decide what gets produced, in what quantity, and who is entitled to it

is an economic system where supply and demand determine prices

is a mechanism that allows buyers and sellers to exchange a good or service

is a blend of government commands and capitalism to address the fundamental economic questions which arise

the economic system where supply and demand define the prices

free markets are unaffected by third parties who are uninvolved

Diagram that shows how households and firms are related by the exchange of resources and products