Jay Baker Economic Systems Mind Map

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Jay Baker Economic Systems Mind Map by Mind Map: Jay Baker Economic Systems Mind Map

1. Business Cycles

1.1. Definition: Periodic but irregular funcuations in economic activity

1.1.1. Example: Is a period that changes economic activity comprised of expansions and contractions as measured by the real GDP. Pros: Is taking advantage of opportunities for your business to be successful and being ahead if your business decide to fall apart. Cons: Not ready for anything or if a disaster decided to happen and you are prepared to override the situation.

2. Fiscal Policy

2.1. Definition: Increase or decrease in taxes or government spending in an effort to achieve economic stability.

2.1.1. Example: Changing tax rates and public spending to curb inflation at a macroeconomic level. Pros: When the government are not raising high taxes, more funding from the government, taking less taxes out. Cons: It's when the government don't raise high taxes, taking less taxes out, more funding spending for any government projects.

3. Socialism

3.1. Definition: A political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

3.1.1. Example: It exist in any country work place in which the production and the distribution of goods and services is a shared responsibility of a group of people. pros: Government can make schooling and healthcare affordable to students and workers. Cons: It gives government full control of how your business and it gives the government make you higher taxes

4. Communism

4.1. Definition: Economy with collective ownership of property under a central government.

4.1.1. Example: Is to simply the default setting for a group relationships in the absence of traditional or imposed hierarchy. Pros: It provides all citizens with all their basic needs that is needed. Cons: It doesn't provide freedom and don't provide free service to anyone.

5. Monetary Policy

5.1. Definition: The regulation of the money supply and interest rates by a central bank.

5.1.1. Example: The goal for monetary policy is to achieve or maintain full employment to achieve or maintain high rate an economic growth. Pros: The pros of Monetary policy that helps promotes stable prices that is useful for making sure inflation rates stay low through out the world. Cons: Adding a lot of money to the economy causing the inflation rate to raise due to the supply and demand for money making things over priced and expensive.

6. Capitalism

6.1. Definition: Economic system is based on a free market, profit motive, competition and private ownership of factors of production.

6.1.1. Example: Having a billion dollar franchise like Walmart that pays it full time workers not much but pays the minimum wage but they still can apply for food stamps. Pros: Private ownership, less government controlling, making profits and keeping it, making your decisions that you can control on your own. Cons: Not paying workers want they should get paid, losing to the competition, not making enough money to stay in business.

7. Deflation

7.1. Definition: A persistent decrease in the level of consumer prices.

7.1.1. Example: When the United Sates was in a recession when the US market crash not getting any kind of money for government spending. Pro: Pros are falling prices, lower costs to customers. Cons: Means falling wages, more credit card spending, higher cost of production.

8. Stagflation

8.1. Definition: Condition of slow economic growth, rising prices and relatively high unemployment.

8.1.1. Example: It's when an economic condition and a business activity that both comes today form an increasing unemployment rate. When the economy is in the recession so they go up on gas prices knowing that gas can back strengthen back the economy. Pros: When the inflation rate is low and when the unemployment rate stay high. Cons: Is when the inflation rate is high and when the unemployment rate remains low.

9. Disinflation

9.1. Definition: It's a reduction of the general price level intended to improve balance of payments without incurring reductions in output, employment and investment.

9.1.1. Example: It is when in which the inflation rate decreases but the rate does not reserve it normally stays the same. Pros: It's a fall in prices, making products affordable to buy. Cons: When disinflation becomes negative to a point that the inflation rate is low.

10. Inflation

10.1. Definition: Is a sustained increase in price level of goods and service in an economy over a period of time.

10.1.1. Example: Is like when prices rising during or over the years to keep with the times and the later model products to sell. Pros: A moderate inflation rate reduces the real value of debt. Cons: If there is a deflation allowing the value of debt increases.

11. Identify the economic system in the United States

11.1. The economic system ,is a system in production, resource allocation and distributions of good and services within a society or a given geographic area.

12. The Importance of the economic system

12.1. The importance of the economic system that uses the production, and distributions, and service to create a sable environment. It's also important making profits in the community and improving generating money and profits within the area to my make better.