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Types of Economies
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Who controls the resources ?
Description Characteristics Who controls the resources ? Examples Market Economy Mixed Economy Command Economy Traditional Economy
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Market Economy (aka Capitalism or Free Enterprise)
Description People make decisions and control the resources and businesses compete without government interference Characteristics Private Property Government stays out Specialization Division of Labor Adam Smith Wealth of Nations Laissez-faire Invisible Hand Who controls resources? People Example Countries United States (closest example – pure market economy doesn’t exist)
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Description Characteristics Examples Market Economy Mixed Economy
Who holds the power ? Examples Market Economy People make decisions and control the resources and businesses compete without government interference Private Property Government stays out Specialization Division of Labor Adam Smith Wealth of Nations Laissez-faire Invisible Hand People United States (closest example – pure market economy doesn’t exist) Mixed Economy Command Economy Traditional Economy
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Command Economy Description Example Countries Characteristics
Government tells businesses what to do and people have little say Characteristics Government owns land and resources Few choices for purchase Gov’t decides What to produce, How to produce, For Whom to produce Karl Marx – The Communist Manifesto Who controls resources? Government Example Countries Cuba N Korea USSR China
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Government tells businesses what to do and people have little say
Description Characteristics Who holds the power ? Examples Market Economy People make decisions and control the resources and businesses compete without government interference Private Property Government stays out Specialization Division of Labor Adam Smith Wealth of Nations Laissez-faire Invisible Hand People United States (closest example – pure market economy doesn’t exist) Mixed Economy Command Economy Government tells businesses what to do and people have little say Government owns land and resources Few choices for purchase Gov’t decides What to produce, How to produce, For Whom to produce Karl Marx – The Communist Manifesto Government Cuba N Korea USSR China Traditional Economy
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Mixed Economy Description Characteristics Example Countries
Mixed Economy Description Combines elements of a pure market economy and a command economy Characteristics Private Property Government regulations John Maynard Keynes Keynesian Economics Pump-priming economics Who controls resources? Mixture of people and government Example Countries United States Great Britain
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Description Characteristics Examples Market Economy Mixed Economy
Who holds the power ? Examples Market Economy People make decisions and control the resources and businesses compete without government interference Private Property Government stays out Specialization Division of Labor Adam Smith Wealth of Nations Laissez-faire Invisible Hand People United States (closest example – pure market economy doesn’t exist) Mixed Economy Combines elements of a pure market economy and a command economy Government regulations John Maynard Keynes Keynesian Economics Pump-priming economics Mixture of people and government United States Great Britain Command Economy Government tells businesses what to do and people have little say Government owns land and resources Few choices for purchase Gov’t decides What to produce, How to produce, For Whom to produce Government Cuba N Korea USSR China Traditional Economy
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Traditional Economy Description Example Countries Characteristics
An economic system based on customs and habits Characteristics Traditions determine occupation No new technology Barter system Who controls resources? Customs/Habits of the area Example Countries Developing Countries
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Description Characteristics Examples Market Economy Mixed Economy
Who holds the power ? Examples Market Economy People make decisions and control the resources and businesses compete without government interference Private Property Government stays out Specialization Division of Labor Adam Smith Wealth of Nations Laissez-faire Invisible Hand People United States (closest example – pure market economy doesn’t exist) Mixed Economy Combines elements of a pure market economy and a command economy Government regulations John Maynard Keynes Keynesian Economics Pump-priming economics Mixture of people and government United States Great Britain Command Economy Government tells businesses what to do and people have little say Government owns land and resources Few choices for purchase Gov’t decides What to produce, How to produce, For Whom to produce Government Cuba N Korea USSR China Traditional Economy An economic system based on customs and habits Traditions determine occupation No new technology Barter system Customs/Habits of the area Developing Countries
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