TYPES OF ECONOMIES AND GOVERNMENTS

Today’s Mission Create 1 double-sided “poster” on 8.5 x 11 computer paper  1 side will include the three different types of economies  Market (Capitalism), Mixed (Socialism) and Command (Communism)  1 side will include…  Constitutional Monarchy  Absolute Monarchy  Presidential Democracy  Parliamentary Democracy  Dictatorship  Theocracy

WHAT TO INCLUDE Economies  Please include a definition that makes sense to you! Use resources from around the room or your phone! (TEPO!!)  Think about WHO determines what to make and how much it will cost  Must also draw a picture representing the term and the definition

WHAT TO INCLUDE Governments  Definition of each type of government  Who rules?  Rights of citizens?  A specific example/country of each type (past or present)

MARKET/CAPITALISM Business owners make decisions on what to produce and how much it will cost Private ownership Laissez-faire (gov’t keeps hand OFF business affairs)

MIXED/SOCIALISM Both private ownership and gov’t control of major industries (utilities, transportation) Welfare state – care for all

COMMAND/COMMUNISM Government ownership of property Gov’t makes all decisions

TRADITIONAL ECONOMY A traditional economy is an economy based on customs, beliefs, rituals, and habits.

PRACTICE QUESTION 1.) When the government controls all major industries and decides what products will be produced and how many of each type of product will be produced, what type of economy is described? A. mixed B. market C. traditional D. command

PRACTICE QUESTION 2.) The economist Adam Smith was an Enlightenment thinker. In his writings, he described how market systems worked and expressed his belief in laissez-faire economics. His ideas influenced how people viewed their relationship with their government. Supporters of Smith wanted government to A. end universal suffrage. B. uphold the divine right of kings. C. protect their freedoms and property. D. provide strict economic regulations on business.

PRACTICE QUESTIONS 3.) In a certain country, decisions regarding production and consumption of goods are based upon customs, beliefs, rituals, and habits. Over time, the economic system changes to one in which production decisions are based on competition and consumer choice. How has the economic system of this country changed? A. from a mixed economy to a command economy B. from a command economy to a mixed economy C. from a traditional economy to a market economy D. from a market economy to a traditional economy

PRACTICE QUESTION 4.). In a certain country, all decisions concerning the production of goods and services are made by the government. However, following a political revolution, a new economic system is set up in which some decisions regarding production of goods and services are made by the government and others are made by individuals and private companies. How has the economy of this country changed? A. from a mixed economy to a market economy B. from a command economy to a mixed economy C. from a market economy to a traditional economy D. from a traditional economy to a command economy

PRACTICE QUESTION 5.) In a command economy, the question of what goods to produce is primarily determined by A. cultural traditions. B. decisions by individuals. C. government plans. D. corporate policies.

PRACTICE QUESTION 6.) Economic systems answer the question of how goods and services are produced. What is one way a country could change from a command economy to a market economy? A. if the government takes control of family-owned farms B. if privately owned banks become subject to stricter regulation C. if agricultural and factory workers are required to join labor unions D. if industries that had been owned by the government become privately owned

PRACTICE QUESTION 7.) In order to stimulate the economy, the United States government lowers personal income tax rates. Why would this action be expected to promote economic growth? A. Businesses would be required to hire more employees. B. Manufacturers would have to pay more for raw materials. C. The government would be less likely to engage in deficit spending. D. Consumers would have more money available to spend on goods and services.

PRESIDENTIAL DEMOCRACY People can vote for both the legislative (law- making) branch and executive branch (President). Example: United States

PARLIAMENTARY DEMOCRACY People vote for the legislature (parliament) Legislature selects the Prime Minister from a member of parliament Example: Great Britain

ABSOLUTE MONARCHY King or Queen has total power – not limited by rules, laws or constitution Example: Louis XVI of France

CONSTITUTIONAL MONARCHY Power passed down through family (hereditary) King/Queen power limited by a constitution Belgium (also has a parliamentary democracy )

THEOCRACY A government ruled by laws of a religion Iran

DICTATORSHIP Ruler has total power Usually rules through fear – backed by military Example past: Hitler, Mussolini Example today: Kim Jong-un (North Korea)

PRACTICE QUESTION 1.) A group of citizens organizes a peaceful march through the streets of their nation’s capital. They carry signs calling for the nation’s leader to resign. Describe how likely this type of protest could be held in a presidential democracy and in a dictatorship. Explain the reason for these differences. (2 points)

orange - parliamentary republicsparliamentary republics green - presidential republics, executive presidency linked to a parliamentexecutive presidencyparliament yellow - presidential republics, semi-presidential systemsemi-presidential system blue - presidential republics full presidential systempresidential system red - parliamentary constitutional monarchies in which the monarch does not personally exercise powerparliamentaryconstitutional monarchies magenta - constitutional monarchies in which the monarch personally exercises power, often (but not always) alongside a weak parliamentconstitutional monarchies purple - absolute monarchiesabsolute monarchies brown - republics where the dominant role of a single party is codified in the constitutionsingle party dark green - countries that constitutional provisions for government have been suspended gray - countries that does not fit in any of the above listed systems

COUNTRY INFORMATION