1. Economic Systems
General Business
Pg 21-32

2. Key Economic Questions
________ goods and services are to be _____________?
________ should the goods and services be produced?
____________ should the goods and services be produced?
What to produce:
Nations differ in their wants just as individuals do.
1) Some might want to produce spaceships while other want to spend their money on military
2) Some countries might only have the resources to produce the basic needs of their people. (food, clothing and shelter)
3) Decisions must be made on which kinds of goods or services are valued the most and best serve the nation.
How should the goods and services be produced?
Based on the resources that are limited a country may use different methods to produce their goods and services.
Example from the book: A country with little capital resources may use more people (human resources) to do the work. (build a road)
A country with many capital resources (machines such as bulldozers) may use fewer people and more capital resources to build the roads.
For whom to produce?
Which citizens will benefit from the production of goods and services? Who’s needs and wants are most critical?

3. Types of Economic Systems
Custom-based Economy/________________
Often in 3rd world countries or developing countries.
The answers to the three economic questions are _______________________
Goods are produced the way they have _______________… each generation follows the what they were taught as children.

4. Types of Economic Systems
Direct (Planned) Economy/_______________
Resources are owned and controlled by the __________________________
________________ answers the three economic questions.
The officials of the government decide through committees what and how goods will be produced and how they will be shared.
They decide:
How much of the nations resources will be spent on military uses and how much will be used to produce consumer and capital goods.
In some countries govt. leaders assign people to careers based largely on the leaders view of the needs for production.
Freedom of the people is very limited.

5. Types of Economic Systems
Market Economy/_________________
Generally found in countries with _______________ forms of government.
Three questions are answered by the ________________
“Marketplace” - could be anywhere
AKA Capitalism- meaning the economic resources are owned by the people, and not the govt.

6. So… which of these three do we live in?
Custom-based Economy
Direct (Planned) Economy
Market Economy

7. In your notes… The American Economic System:
This means that basic economic decisions are based on the actions of ____________________________________________________________________________
FREE ENTERPRISE SYSTEM:
The buyers and sellers (the people of the country) make the decisions with the choices we make with what we buy.
Free Enterprise system allows us to answer the three economic questions

8. Features of the US Market Economy
Private Enterprise
Private Property
Profit

9. Features of the US Market Economy
Competition
__________________among businesses
Freedom of Choice
Rights that ___________________________
What are some freedoms?