Characteristics of the basic economic systems Objective 9.4 (CE9b) Characteristics of the basic economic systems
an established way of dealing with… economic system: an established way of dealing with…
consumer services goods resources capital labor producer distributor land capital labor producer distributor management entreprenuer
consumer services goods resources capital labor producer distributor land capital labor producer distributor management entreprenuer
an established way of dealing with economic system: an established way of dealing with production, distribution, and consumption of goods and services
an established way of dealing with economic system: an established way of dealing with production, distribution, and consumption of goods and services
who decides who gets the goods and services? economic system: who decides who gets the goods and services?
The key to identifying economic systems is to determine…. who is in control of… CHOICE
“Chart of economic systems” CHOICE What and how much produced How to produce For whom to produce GOVERNMENT INDIVIDUAL
command economic system
command economic system The government has complete control over choice
command economic system lack of consumer choice: the consumer has NO voice in deciding what will be produced
command economic system centrally planned economy: the national government makes the econ. decisions (What, How, For whom)
command economic system central ownership of property and resources: The national gov’t owns the factors of production
command economic system COMMUNIST: The command system is usually called “communism”
demand economic system
demand economic system The individual has complete control over choice
demand economic system Adam Smith In 1776 he wrote book: Wealth of Nations
demand economic system The book examined the consequences of economic freedom
demand economic system The book outline the free enterprise system
demand economic system “laissez-faire” means: government leaves economics alone
demand economic system individual choice: people decide how they will spend their money
demand economic system consumer sovereignty: the consumer decides what will be produced by using his buying power
demand economic system profit: the entrepreneur keeps the money that is left over after his expenses
demand economic system competition: entrepreneur tries to produce goods and services that will appeal to the consumer
demand economic system private ownership of property and resources: Individuals own the factors of production
demand economic system FREE MARKET ECONOMY: Another name for the demand economic system is “free market economy”
demand economic system CAPITALIST: Another name for the demand economic system is “capitalism”
Chart of economic systems CHOICE GOVERNMENT INDIVIDUAL
Chart of economic systems CHOICE COMMAND DEMAND
Chart of economic systems CHOICE COMMUNIST CAPITALIST
Chart of economic systems CHOICE FREE MARKET COMMUNIST