Tuesday March 24, 2015 Types of Economies Eagle Claw Nail Salon Agenda Homework Types of Economies Eagle Claw Nail Salon Types of Economies Half Sheet Types of Economies Half Sheet

Civics and Economics Day 126

Economics Systems

System A group of individual parts that work together to form a whole. What are the “parts” of the economy?

Types of Economic Systems Traditional Command Market Mixed

Traditional Based on Customs and traditions. Economy based on farming and hunting. People will make what they always make; they will do the same work their parents did. Examples: Some parts of Africa, India, Eskimos

Command Economy Government owns and operates the factors of production. The government answers the questions What?, How? And For Whom? Communism and some forms of Socialism- examples of a command economy Examples: North Korea, Cuba

Communism A system where there is no private property ownership and the government owns/controls all of the means of production.

Socialism The Government owns the major means of production, and establishes regulations, but there is still a great deal of private ownership. A Mixed Style Economy/Command Style

Income Level “The Affluent “ “Working Class” Tax Rate 40% 10% Amount Taxed Government Funds Given End Result

Market Economy A system in which private individuals control ALL of the means of production. Means of production- the raw materials and tools used to make things. 1. Business owners answer the questions What?, How? And For Whom? 2. Capitalism- example of a market Economy

Origins of Capitalism Where did this idea come from? Adam Smith wrote a book called A Wealth of Nations. He said individuals seeking profit (making money) would benefit the whole society. Came up with the idea of laissez-faire economics. “ to let alone” meaning the government should stay out of the economy

Mixed Economy Has elements of both command and market economies. Individuals own most resources and determine what to produce. Government regulates certain industries.

Is the United States a Market/ capitalist economy? Turn to your neighbor and spend 2 minutes answering yes or no and why?

Is the U.S. a true capitalist economy? No the U.S. has a mixed economy. The U.S. is a mix of both capitalism and socialism. There is a great deal of private ownership, but there is also government regulation. The government also has control over wages, social security and some policies. The U.S. is however, closer to capitalism than any other system.

Eagles Claw Nail Salon Take 10 minutes to answer each of these questions in complete sentences. What is the goal of all businesses? What happens if their prices are too high? How can high prices be a bad thing? What do businesses spend their money on? How does the money from the salon affect the rest of the economy?

Traditional Command Mixed Market Large Businesses Small Business G= Government I = Individuals B= Both V=Village.

Spectrum Government Control Free Economy Put in Order from most Government control to least (Market, Mixed, Command)