Edexcel AS level economics macro
Self Sufficiency - Answer-Poverty
Specialisation - Answer-Prosperity
What does money allow us to do? - Answer-Money allows us to buy goods and services
What does money allow? - Answer-it allows individuals and firms to specialise in production without ne...
Edexcel AS level economics macro
Self Sufficiency - Answer-Poverty
Specialisation - Answer-Prosperity
What does money allow us to do? - Answer-Money allows us to buy goods and services
What does money allow? - Answer-it allows individuals and firms to specialise in production
without needing to barter for the goods they want, requiring a double coincidence of wants
Functions of money - Answer-A medium of exchange
- can be used to buy goods and services
- includes payments for factors of productions
A measure of value
-Acts as a unit of account, allows comparisons and determination of worth
A store of value
-can be saved for future purchases
A method of deferred payment
- Can be borrowed and repaid in the future
- Interest cost compensates for use of money
Key economic questions - Answer-What to produce?
How much to produce?
How to produce it?
Who gets what?
Dead white economists - Answer-Adam Smith- An enquiry into the nature and causes of the
wealth of nations
Friedrich Hayek- the road to serfdom
Karl marx- das capital
Free market economy - Answer-Where the government have limited restrictions and legal
barriers on the market. The resources are allocated through the price mechanism. This is a
more capitalist system supported by the economists Adam Smith and Friedrich Hayek. In
Smith's book The Wealth Of Nations and Hayek's book The Road To Serfdom.
Mixed Economy - Answer-A mixed economy is where elements of a command economy and a
free market are combined into one. These sort of systems are used in the UK. This where
resources are owned by both the private sector and the public.
Command Economy - Answer-In a command economy all resources are owned by the
government and only they can decide who gets the resources. This type of economy is
supported by the economist Karl Marx in his books Das Capital. This type of economy has been
used in the Soviet Union and more presently in Cuba and China. This is a communist economy.
How are resources allocated in a free market economy - Answer-Through the price mechanism
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