Guided Notes - Economic Principles and Policies (1)
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School
Desert Vista High School**We aren't endorsed by this school
Course
HISTORY B
Subject
Economics
Date
Dec 17, 2024
Pages
4
Uploaded by UltraLionMaster1175
Economic Principles and Policies Objective In this lesson, you will Basic Principles of EconomicsOpportunity Cost Every economic and carries costs, or risks, as well as benefits, or rewards. ____________ ____________ →Economists call this phenomenon "_______________________ cost," meaning the choices you make are done so at the cost of the best alternative option. →Imagine that the government allocates $2 billion for rebuilding infrastructure. The program could____________________ provide a number of benefits. →It is important to weigh the potential benefits of the program its opportunity costs. With the money it spent, the government could have funded other programs . ____________________________Comparative Advantage "Comparative advantage" is an economics term that describes how one country or organization has the ability to _____________ a good or service at a _____________ cost than its competitors. Countries tend to __________ only those goods in which they have a comparative advantage. Defining Economic Indicators Economists have developed certain measures that they use to understand the of a given economy. These measures are known as economic . The domestic product (GDP), the consumer _________________________________________________________ index (CPI), and the unemployment rate. •GDP: the total _______________ amount of all goods, services, and structures produced within a country in a year. The GDP helps gauge an entire economy's ______________ or weakness. •CPI: general price _____________ occurring in an economy. It helps gauge inflation and cost-of-living changes.
•Unemployment rate: the number of people out of work as a percentage of the __________ workforce. The business cycle describes the pattern ofperiods of economic expansion and contraction. A normal economy will show a trend of increasing real GDP overtime. •Expansion is a phrase where there is increase in economic activity. During an expansion, productivity, employment, and profits skyrocket. •Contraction is a decrease in economic activity. It is normally accompanied by rise in unemployment and a drop in GDP. •A prolonged contraction/recession is called a depression. It last at least 2 years. Inflation: a general increase in prices overall. →Over time, inflation causes money to lose some of its __________. Deflation: a general decrease in prices overall. →During a period of deflation, a currency will actually ______________ in value. A moderate rate of inflation occurs naturally and is relatively harmless, but extreme inflation and deflation ________ can be very ___________________ to the economy. Economic Systems There are four main types of economic systems: market, command, mixed, and traditional. •In a ______________ economy, production and distribution of goods and services take place through free markets and are guided by a ________ price system. Businesses and consumers _____________what they will purchase and produce without government intervention. •A command economy is __________________ planned and controlled. The government often________ the means of production and distribution, and there is little consumer _____________. •A mixed economy has aspects of ________ a command economy and a free market. There is some government ________________________ in the economy, but this intervention occurs with some level of private economic ______________. •Traditional economies are driven by cultural customs and may employ a ____________ system.___________________
Capitalism Capitalism is an economic system in which the means of production are ______________ owned and operated for profit through employed labor. The idea of a ________ market carries great importance in capitalist economies. Strict free-market capitalists believe in ______________-__________ ideals. This French term refers to the belief that the __________________ should stay out of all economic affairs as much as possible. Today, many areas of the world have adopted a more ____________________ approach to their economies. Socialism and Communism In the early 1800s, communism and socialism were relatively __________________________ concepts that embraced some sort of control. In contrast to market economies, which feature little or no government control, modern socialism and communism, in theory, rely on government or social control of ________________ and income . ____________________•Modern socialism is a system based on a _____________economy, which advocates that society, or the government owns and/or manages the means of production and distribution. In actual practice, society or the government simply _____________ more control over ____________ property and business than is found in a market economy; but private property and businesses still exist. •With modern __________________, the government owns the means of production and controls both production and distribution. Modern communism advocates that ______ property should be owned by society or the government. There is no private property or ______________. The Mixed Market of the United States Many nations do not use a single, ________ economic system. In fact, very few _________ capitalist or communist nations exist or have ever existed. Although the United States primarily has a __________________ economy, the government exercises some ____________________ and economic involvement, including taxation.
_•Wall Street provides a good example of this ___________________________-market system. Investors buy and sell the stocks on Wall Street; however, the US government exercises by passing laws that affect the ____________, including making insider trading illegal. In the US, citizens and politicians continually debate the right between capitalism, innovation, and free markets on one hand, and welfare, economic , and opportunity on the other. The US government plays an important role in protecting Americans from the ____________________________________________________ risks of capitalism. Summary What are the main differences among capitalism, socialism, and communism today?