LO1: Define Economic Liberalism

LO2: Identify and describe the characteristics of economic liberalism

LO3: Compare capitalism to other eco systems-(comparison socialism)

Economic Liberalism- An economic system organized on individual lines, meaning that the greatest possible number of economic decisions are made by individuals or households rather than by collective institutions or organizations. 

Characteristics of Capitalism-  

• A Two-Class System 
• Profit Motive and companies exist to make a profit. 
• Minimal Government Intervention and capitalist societies believe markets should be left alone 
• Competition and true capitalism need a competitive market. 

Gross Domestic Product- The total value of goods produced, and services provided in a country for one year. 

1. 1.China 

2. 2.United States 

3. 3.India  

4. 4.Japan  

5. 5.Germany 

6. 6.Russia  

7. 7.Indonesia  

8. 8.Brazil 

9. 9.United Kingdom  

10. 10.France
    
    

1. Of what importance is the division of labor? What methods did Smith use to arrive at his conclusions?   

  Division of labor is essential to economic progress because it allows people to specialize tasks. This specialization makes workers more efficient, which reduces the total cost of producing goods or providing a service. Smith used the methods of.  

2. What is the "natural" and "market" price? What economic process is Smith describing in Book 1, Chapter 7? 

The price that a commodity is being sold is a market price. Natural price Smith said is “When the price of any commodity is neither more nor less than what is sufficient to pay the rent of the land, the wages of labor, and the profits of the stock employed in raising, preparing, and bringing it to market.” The process Smith is describing is the economic process.  

3. What is the "invisible hand" (paragraph 9)? What function does it play? 

The invisible hand is when anybody can become a producer or a consumer, people's demand for different goods and their production of the same good will be equal, and the allocation of their resources for production and consumption of different goods will be optimal for the welfare of the society.  

4. What are the effects of governments and monopolies on the economy? 

A monopoly is when a company is completely alone in supplying a particular thing to a marketplace. If left unmonitored and unregulated, monopolies can adversely affect businesses, consumers and even the economy which is price, supply and demand. Also, the federal government effects overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability.