Flashcards
Factors determining economic activity
Cards in this deck (5)
- 1What is a state controlled economy?- The state decides what is produced and how it is distributed
- Sometimes referred to as planned economies (because the production and allocation of resources is planned in advance)
- It removes a great deal of individual choice
- Has contributed to reforms of the economies in Soviet states. - 2What is market economies?- Supply and demand determines how resources are allocated
- The interaction of demand from consumers and supply from businesses in the market will determine the market-clearing price.
- Market clearing price= balance between what consumers are willing to pay for goods and services, and what suppliers will accept for them. - 3What is a mixed economies?- Combination of a market economy with element of state control.
- Mixed economy the government is able to provide a welfare system to support the unemployed, the infirm and elderly.
- Government will spend money on defence, education, public transport. health & police services - 4How do the government raise finance in a mixed economy?- Collecting taxes directly from wage-earners and companies
- Collecting indirect taxes e.g. VAT and taxes on petrol, cigarettes and alcohol
- Raising money through borrowing in the capital markets - 5Open Economies- Relates to a country's economic relationship with outside countries.
- Protectionism: When a country prevents other countries from trading freely to preserve its domestic market
- World Trade Organisation (WTO)
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- Level 3 IOC - The Economic Environment Flashcards on Factors determining economic activity, created by Miss Emmz on 11/10/2015.
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- Miss Emmz
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