ECONO-2202 Lecture Notes - Lecture 2: Mixed Economy, Invisible Hand, Planned Economy
Document Summary
Chapter 02 - the market system and the circular flow. Thus, the u. s. economy is best categorized as a mixed economy: command economy, socialism or communism, there is public (state) ownership of resources, economic activity is coordinated by central planning. If the worker were paid in crankshafts, he would have to find grocers, clothing retailers, etc. , who would be willing. Chapter 02 - the market system and the circular flow to exchange their products for a crankshaft. In an effort to stimulate demand and respond to market trends and conditions, Mcdonald"s has introduced a number of new menu items over the years. The success and failure of these new items illustrates the important role of the consumer in determining what will be produced: businesses are not really free to produce what they wish. They must match their production choices with consumer choices or face losses and eventual bankruptcy.
