Understand economic systems. Economic Systems Objective 1.01 Understand economic systems. Economic Systems
Topics Main types of economic systems
What are the three economic questions that all economies must answer? Economic Systems What are the three economic questions that all economies must answer? All economies must answer three economic questions. What to produce? How to produce? For whom to produce?
Economic Systems What to produce? How to produce? For whom to produce?
Economic Systems An economic system is a nation’s plan for answering the three economic questions. What to produce? How to produce? For whom to produce?
Economic Systems The main types of economic systems are: Command or Communist Market Traditional Mixed
Economic Systems Who owns the resources in the main types of economic systems? Command Market Traditional Market Place: Where goods and services exchange hands. Centered on family Government The people A command, or communist, economy is an economics system in which the government owns resources and dictates what is produced. A market economy is an economics system where goods and services are owned and controlled by the people. A marketplace is anywhere that goods or services exchange hands. In a traditional economy, goods and services are produced the way it has always been done (customs) and centered on family. A mixed economy combines the elements of the command and market economies.
Economic Systems Command Economy The government owns resources and dictates what is produced. (Communist governments have command economies) China Cuba North Korea
Economic Systems Market Economy Goods and services are owned and controlled by the people. United States United Kingdom
Economic Systems Traditional Economy Goods and services are produced by custom, tradition, and belief systems and controlled by the family. Third World and developing countries: Ethiopia Uganda Afghanistan
Economic Systems Mixed Economy Elements from the command and market style. Decisions are made by government and people.