Economic Systems and Macroeconomics: Crash Course Economics #3 – Flashcards

What will we produce? How will we produce it? Who gets it?

Land, labor, and capital. Das Kapital."The theory of communism may be summed up in the single sentence: abolition of private property."

The government controls production.

Everyone owns a faction of production and output is distributed equally.

Both private property and some public ownership and control of industry. They have specific collective objectives such as free and equal access to things like education and health care.

In both Communism and Socialism, there is economic planning, and the government, usually in the form of some bureaucratic agency, helps decide what to produce, how to produce it, and who gets it.

When the Economy is completely controlled by the government.

Individuals own the factors of production and the goverment keeps a "Hands Off" aproach.

The unintended social benefits resulting from individual actions.

"It is not from the benovolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."

Modern Economies are neither completely free nor planned. There's a spectrum of government involvement.

Businesses sell goods to households in the product market, Households provide resources in the resource market to pay for goods, and the government also steps in. The businesses also use the money from households to pay their costs. Government tax households and borrow money to pay off expenses.

There are no solutions, only tradeoffs.

"It doesn't matter whether a cat is black or white, if it catches mice, it is a good cat."