Socalism- Large part of economy is controlled by the government. The Gov regulates prices, goods, etc.

Traditoional - Based on carrying on a business from past generations and families. Seen in rural countries.

Capitalism- People decide what to do with their businesses. They sell and price what they want without gov intervention.

Mixed: Mixes all three. Businesses are free to do almost whatever they want, but have to pay taxes in US.

What are the key components of capitalism?

Private individuals and companies can decided what to sell, prices, and almost everything else. The government is not involved in the market with capitalism.

Explain retained earnings.

Money you save for the business after paying expenses and all else. You can save up to buy procustc for your business.

How does a P&L Statement work and why is it important?

It is your profit and loss statement. The money you make and use is written on this paper to see your profit over time.

Describe resource management.

Resource manemgent is the effective use of resources you have available. This will all create opportunities for a profit.

Explain charitable giving.

When you give your money, talent, or resources to others to help them out.

Economics: the study of how a society manages all of its resources to produce and distribute goods and services

Supply and Demand: the price of goods and services are based on the supply of something and the demand for it

Scarcity: when there is a greater demand for something than the amount actually available

Inflation: the general increase in the price of goods and services over time measured as an annual percentage increase (or decrease)

Opportunity Cost: the financial opportunity that is given up because you choose to do something else with your money

Profit: the positive difference between the total revenue from a business or investment minus total expenses

Capital: refers to money; specifically financial assets or the financial value of someone’s assets

Capitalism: a system of economics based on the private ownership of business and the products (goods and services) made and sold

P&L Statement: profit and Loss Statement

Retained Earnings: business income you save for emergencies and future expenses

Resource Management: the effective use of all the resources you have available to your business

Socialism: an economic system based on public or collective (such as government) ownership of resources and production