Term
| Mixed Economy (aka Socialist Economy) |
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Definition
| a system in which economic decision are principally market driven, and ownership is principally private, but the government intervenes from, slightly to extremely, in resource allocations and economic decisions. |
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Term
Market Economy
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Command Economy |
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Definition
Market Economy-a system in which individuals, not the government, make the majority of economic decisions.
Command Economy-a system whereby the government owns and controls resources. |
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Term
Economic System
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3 Types of Economic Systems |
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Definition
a set of structures and processes that guide the allocation of resources, and shapes the conduct of business activities in a country.
1)-Market
2)-Command
3)Mixed
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Term
Balance of Payments (BOP)
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2 Major Components of BOP |
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Definition
a system of recording all of a country's economic transactions with other countries over a period of a year.
1) Current Account-tracks all trade activity in merchandise
2) Captial Account-tracks all loans given to foreigners, and received by citizens. |
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Term
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Definition
measures the extent to which the distribution of resources deviates from a perfectly equal distribution.
- Score of 0 = Perfect Equality
- Score of 1 = Perfect Inequality
- Assesses the degree of inequality in the distribution of family income in a country
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Term
Purchasing Power Parity (PPP)
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How is PPP Used? |
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Definition
a conversion that adjusts the exchange rate so that an identical good in two different countries has the same price when expressed in the same currency.
- Used to estimate the value of a universal "basket" of goods (soap/bread), and services (telephone/electricity) that can be purchased w/ one unit of a country's currency
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