Economies

Economy is. . .

• The production, distribution, trade and consumption of GOODS and SERVICES.

• A market is where goods and services are bought, sold or traded.

• A Free Market Economy is an economic system where merchants and consumers can buy, sell or trade FREELY.

• The United States has a free market economy system.

A consumer is. . .

• Any person or company who buys or trades for goods or services.

Government does NOT have money. . .

• Governments must tax citizens in order to support their needs.

• Typically, the rich are taxed higher than the poor and then have the resources spread around (giving some of it to the poorer people.)

Socialistic economy

• Government controls some aspects of the economy.

• Takes money from the wealthy and redistributes it to the poor.

• Makes certain government controlled things available to everyone – education, health care, food, jobs and retirement.

Communist Economy

Supply and Demand• Supply – The amount of goods or services.

• Demand – What the consumer wants.

• Law of Supply – When supply increases, the price decreases.

• Law of Demand – When demand increases, the price increases.

Inflation and Deflation• Inflation – When the money supply

increases, so the VALUE of money decreases.

• Deflation – When the money supply decreases, so the VALUE of money increases.