Term 1 Economic system: An organized way of providing for the wants and needs of a countries people.

Term 2 Traditional economy: Nearly all economic activity comes from ritual, habit, or custom.

Term 3 Command economy: A central authority makes most of the WHAT, HOW, and FOR WHOM decisions. Economic decisions are made by the government.

Term 4 Market economy: People and businesses act in their own best interests to answer the WHO, WHAT and HOW questions. A market is an arrangement that allows buyers and sellers to come together in order to exchange goods and services.

Term 5 Social Security: A federal program of disability and retirement benefits that covers most working people.

Inflation: A rise in the general level of prices. Term 6 Inflation: A rise in the general level of prices.

Term 7 Fixed income: An income that does not increase even though prices go up.

Capitalism: People (citizens) own the factors production. Term 8 Capitalism: People (citizens) own the factors production.

Term 9 Free enterprise: Competition is allowed to flourish with a little government influence.

Term 10 Voluntary exchange: The act of buyers and sellers freely and willingly engaging in market transactions.

Term 11 Private property rights: A privilege that entitles people to own and control their possessions as they wish.

Term 12 Profit: Is the extent to which persons or organizations are better of at the end of the a period than they were at the beginning.

Term 13 Profit motive: The driving force that encourages people and organizations to improve their material well-being.

Term 14 Competition: The struggle among sellers to attract consumers while lowering costs.

Term 15 Consumer sovereignty: Called the consumer is always right or the consumer is the ruler of the market.

Term 16 Mixed economy: People carry on their economic affairs freely, but are subject to some government intervention and regulation.