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Chap 2

This chapter discusses how economic conditions affect businesses and how businesses benefit communities. It examines different economic systems including capitalism, socialism, and communism. It defines key concepts such as macroeconomics, resources, and different market structures. It also defines socialism and communism and discusses some benefits and consequences of these systems. Finally, it introduces important economic indicators such as GDP, unemployment rate, and inflation.

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9 views2 pages

Chap 2

This chapter discusses how economic conditions affect businesses and how businesses benefit communities. It examines different economic systems including capitalism, socialism, and communism. It defines key concepts such as macroeconomics, resources, and different market structures. It also defines socialism and communism and discusses some benefits and consequences of these systems. Finally, it introduces important economic indicators such as GDP, unemployment rate, and inflation.

Uploaded by

trangiaptung101
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Chap 2: Structure

- How economic conditions affect businesses


o Economics: the study of how society choose to employ resources to
produce goods and services and distribute for consumption.
o Macro E: looks at the operation of a whole country’s economy
o Resources development
o The secret to creating a wealth economy
 A large educated population can be a valuable resource
 aThe challenge for Macroeconomists is to determine what makes a
countries poor/wealthy and then implement policies and programs
that lead to increased to prosperity for everyone
- How businesses benefit the community.
o Freedom in the market
o 3 economic systems:
 Communism (The Government plays the main role)
 Socialism (Mixed economy: Balance the Government and Market)
 Capitalism (Free market capitalism)
- Understanding free-market capitalism
o The right to own private property
o The more you do, the more you earn, no need to share
o The right to freedom of competition
o The right to freedom of choice

 The stronger exist.


o 4 types of free-market
 Perfect competition: Many buyers and sellers, noone controls the market
other than the two
 Oligopoly: many buyers, but few sellers
 Monopoly: only 1 seller
 Monopolistic competition: Large number of sellers producing very similar
products.
 * Benefits and drawbacks: slide
- Some definitions:
o Socialism: basic businesses should be owned by the government so that profits
can be more evenly distributed.
o Communism: the government makes almost all economic decisions and owns
almost all the major factors of production.
 Benefits:
o Take income from the wealthy and redistributes to poorer people
o Free education
 Negative consequences:
o Brain drain
o Fewer inventions and less innovations
- Key economic indicators
o Gross Domestic Product (GDP): the total value of final goods and services
produces in a country in a given year
o Unemployment rate: the number of civilians at least 16 years old who are
unemployed and tried to seek job within the prior 4 weeks.
o Inflation: a general rise in the prices of goods and services over time.

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