Economic Goals & Systems

Economics systems Economic Goals Each country has an economic system, or a method used to produce, allocate, and distribute its natural resources in order to produce goods and services. Economic Goals Goal: Efficiency Maximizing efficiency of resources.

c. Goal: Security and Predictability b. Goal: Freedom Government intervention hinders economic freedom of a country Example: minimum wage, taxes... When freedom increases, so does GDP c. Goal: Security and Predictability People want to live in a country that is predictable Goods and services will always be present (no shortages) Banking institutions are stable (FDIC, Fed Reserve) Government will provide a safety net for people (Medicare, Medicaid, Welfare, etc.)

d. Goal: Economic Equality all people receive equal pay for equal work. e. Goal: Growth and Innovation Governments try to regulate economies to grow at a slower and steady rate in order to prevent bubbles, crashes, recessions.

Free Market, Command, Mixed Market Economic Systems Traditional – relies on habit, custom, or ritual to decide what is made, how much is made, and who makes it. Small, inefficient, little technology, and communal based. Hunter & Gather tribes/families Barter – an economy that uses no money. Free Market, Command, Mixed Market