RSM100Y1 Study Guide - Final Guide: Planned Economy, Centralized Government, Economic System
Document Summary
Business: an organization that produces or sells goods or services in an effort to make profit. Profit: the remains after a business"s expenses have been subtracted from its revenues. Businesses exist to earn profits for owners: businesses produce goods and services, businesses provide jobs, businesses create new innovations, business"s profits increase the personal incomes, businesses may support charity. Economic system: the system which allocates the nation"s resources among its citizens. Information resources: specialized knowledge and expertise such as market forecasts, economic data, etc to help the business achieve it"s goal. Command economy: centralized government decides how to allocate the resources. Market economy: individuals allocate resources through the market activities. Mixed market economy: a mixture in which elements of a command economy and a market economy are evident. Input market: firms buy resources that they need in the production of goods and services. Output market: firms supply goods and services in response to demand on the part of consumers.
