Command, Traditional, Market Economic Systems Command, Traditional, Market

3 Types Of Economic Systems Traditional Command Market

3 Questions Of Allocation What to produce? How to produce? Who to produce for?

Traditional Little room for change Relies on past habit to answer production questions Traditional Little room for change

Command Central or main government answers production questions Government tends to own or control main resources Can be democratic (socialist) or authoritarian (dictator)

Consumers and producers answer production questions through voluntary trade Market Capitalism -Consumers decide what is produced Producers decide how it will be produced Income depends upon the resources you have to sell

Command Economy Market Economy Resource Ownership What to produce Price Setting ability Decision on How to produce Social Goals Customer Access Consumer ownership Government ownership Consumers decide Government decides Government decides Supply and demand decide Government decides Producers decide Government selects social goals Market decides social goals Purchasing ability decides who can access Government decides who can access