1. Economic Systems and Growth
Macroeconomics
Economic Systems and Growth
Purpose: Identify how nations use their goals to answer the key economic questions.

2. I. Goals
Understand the theme of each system and the strengths and weaknesses of each
Relate the 7 Broad Economic Goals from yesterday to the three primary economic systems

3. II. Key Economic Questions

4. III. Traditional Economies
What to produce?
What is needed for survival
Ex. Food and shelter
How to produce?
Based on culture and practices that are passed on
Ex. Fishing for food
Who to produce for?
Based on customs or traditions
Ex. The community or deities

5. III. Traditional Economies
Strengths
Clear work roles
Little to no waste
Little disagreements
Weaknesses
Slow to innovation
Less productive
Lower standard of living
South American Tribe:

6. IV. Market Economy Based on supply and demand
What to produce?
Based on supply and demand
Ex. Pokémon is popular, so you will see more merchandise
How to produce?
Business decisions
Ex. Manual labor vs. Machinery
Who to produce for?
Whomever will purchase the good or service
Ex. Customers who are willing and able to pay

7. IV. Market Economies Strengths Weaknesses Innovation
Individual freedom
Private ownership
Consumer sovereignty
Weaknesses
Equity is challenging
Not much job security
Effective legal system that is nondiscriminatory
Seinfeld:

8. V. Command Economies The government Ex. China’s steel production
What to produce?
The government
Ex. China’s steel production
How to produce?
Ex. Russia’s production of glass
Who to produce for?
Ex. The government decides on the allocation of goods to the people

9. V. Command Economies Strengths Weaknesses Jobs and income for all
Nationalist propaganda
Government has a more direct role
Weaknesses
Needs are not met
Little incentive to create
Freedoms are sacrificed
The Office: