1. ECONOMIC SYSTEMS
Vocabulary Slides

2. ECONOMIC $Y$TEM$
An economic system describes how a country’s economy is organized
In every country, there is a scarcity of resources. A country’s economic system determines how scarce resources will be used.

3. The 3 Basic Questions that every Economic System must answer
What to produce? What kinds of goods and services will we make?
How to produce? What will be used to make these resources?
For Whom to produce? Who gets to use these goods and services?

4. TRADITIONAL ECONOMY
Based on tradition and custom - the way things have always been done
Often use the barter system
Examples:
African tribes
Any native people (tribal societies) in developing nations

5. COMMAND ECONOMY
The GOVERNMENT owns land, determines wages and prices, assigns jobs. The government answers all of the Basic Questions and controls the economy.
EXAMPLES: North Korea, former Soviet Union, Cuba, Saudi Arabia

6. MARKET ECONOMY
Individual buyers and sellers make all the decisions in a
MARKET ECONOMY
Also Known As:
Capitalism
Free Enterprise
Private Enterprise
Laissez Faire (hands off…the economy)

7. The 5 Hallmarks of a Market Economy
1. Private Ownership
2. Entrepreneurship
3. Competition
4. Price System & Profit
5. Freedom of Choice
(to choose your job, shop where you want, set prices, start businesses, buy what you want)

8. Mixed Economy GOVERNMENT & INDIVIDUAL buyers and sellers
make the decisions and answer the 3 Basic Questions
The government is involved in setting economic and social policies in a MIXED (aka MIXED MARKET) economy.

9. You heard it from THE DONALD:
THE UNITED STATES is a
MIXED MARKET ECONOMY!
PS: There really aren’t any true market economies today.
Others examples: Canada, Japan, Taiwan, South Korea, Australia, most European nations

10. Mixed Market? HOW?? Social Security Medicare/Medicaid Food Stamps
Public Housing
Pollution Law (Regulations)
Unemployment Insurance
Stimulus Package
Bank Bailouts
Post Office
Business Licenses
Choose 5 of the above list and label them ”Government in Mixed Market Examples” You can put this on the back of your worksheet.