Political system, The way a country is governed and how leaders make decisions., Economic system, The way a country produces, distributes, and uses goods and services., Market economy, An economy where businesses and individuals make decisions based on supply and demand, with little government control., Centrally planned ec, An economy where the government controls production, prices, and resources., Mixed economy, An economy that combines both private businesses and government control., Democracy, A political system where citizens vote to choose their leaders., Autocracy, A political system where one person has all or most of the power., Underdeveloped count, Countries with very low income, limited industry, and weak infrastructure., Developing countries, Countries that are improving economically and industrially but are not fully developed., Developed countries, Countries with strong economies, advanced technology, and high living standards., Gross Domestic Produ, (GDP): The total value of all goods and services produced in a country in one year., Business cycle, The natural rise and fall of economic growth over time (boom → recession → recovery)., Absolute advantage, When a country can produce a product more efficiently than another country., Opportunity cost, The value of the next best choice you give up when making a decision., Comparative advantag, When a country can produce a product at a lower opportunity cost than another country., Lobbying, When corporations or groups try to influence government decisions and policies..

Chapter Four

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