2. • Traditional Economy – An economic system
that is based on the customs & beliefs of the past;
uses bartering.
• Command Economy - An economic system
where the government makes all of the production
decisions.
• Market Economy – An economic system where
the citizens have the most freedom regarding
running their businesses.
• Mixed Economy - The economic system of most
democratic nations; a mix of command and market.
3. • Free enterprise - Competition between
businesses; only found in market and mixed
economies.
• Physical trade barrier – A physical feature
that makes trading difficult.
• Tariff – A tax added to imported goods.
• Quota – A limit placed on imported goods.
• Embargo - A complete ban on trading between
two countries.
4. • Currency Exchange Rate –The price of one country’s
currency compared to another country’s currency.
• Gross domestic product – The total amount of goods and
services produced in a country in one year.
• Human capital – Human resources with the education,
training, skills, and value they bring to the economy.
• Capital goods – Factories, technology, machines, and
buildings that businesses need in order to function.
• Entrepreneur – Someone who takes a risk to start his or her
own business.
• Literacy Rate - The percent of people in a country (over age
15) that can read and write.
