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Published byThomasina Merritt Modified over 8 years ago
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Economic Systems
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Capitalism Free Enterprise Market Economy Definition An economic system based on private ownership of property and means of distribution “Private “= people or individuals Goal Maximum profit for owners
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How is the goal of Capitalism achieved? Private control of resources, production, distribution Laissez Faire Theory Government should play little to NO part in the economy
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How is the goal of Capitalism achieved? Law of Supply and Demand High demand and low supply= high price High supply and low demand = low price Role of Consumer Competition
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Karl Marx’s ideas in response to the Industrial Revolution gave rise to 2 types of economies Socialism Communism
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Socialism Definition An economic system in which the major industries resources, and services are owned by the government Goal To provide all citizens with basic economic needs
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How is the goal of Socialism achieved? Government owns main industries, resources, and distribution methods Some private ownership (small business) The creation of a welfare state
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How is the goal of Socialism achieved? Creation of a welfare state What you get Housing, schooling, health care, retirement pension, unemployment insurance, guaranteed vacation time, maternity / paternity leave What you give Everyone pays really high taxes
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Communism Definition Government controls all parts of the economy Goal To create a classless society replacing competition with cooperation to ultimately meet the needs of everyone.
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How is the goal of Communism achieved? Government controls everything!!!!!!!!!! Production Distribution Resources Land Consumption
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Mixed Economy An economic system that is shaped by a variety of factors private ownership government involvement culture/ tradition Most economies today are mixed!
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Shanghai, China 1990
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Shanghai, China 2010
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In what ways is the US economy mixed? What is controlled by the government? What is privately controlled? What is influenced by culture and tradition?
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