1. The way a group of people produce and distribute goods and services.
Economic Systems
The way a group of people produce and distribute goods and services.

2. 4 Types of Economic Systems
Command
Traditional
Market
Mixed

3. Traditional Economy Definition Characteristics Examples
When people grow or make their own goods
Characteristics
Found in developing countries
Use of Barter System (Trade goods for goods)
Production & Distribution of goods/services is based on
customs and traditions of society.
Based on how things were done in the past.
Examples
Found in remote Rural areas (Congo/Amish)
Found in many developing countries

4. Command ECONOMY Definition: Gov’t makes all economic decisions
and controls everything
Characteristics:
No competition
Government determines
For Whom, how and what products will be made
Prices of products
People are not free to choose what to buy or
sell

5. Command ECONOMY Con’t Examples:
Communism – economic system in which the central government directs all major economic decisions.
Socialism – Government has some controls over basic means of production the rest are privately owned and operated.

6. Command ECONOMY Con’t Role of Government
Make all decisions about what is produced and who gets it

7. Market ECONOMY Definition: Characteristics:
People are free to obtain goods and services in any way they want
Characteristics:
Competition exists
NO Government Interference (Laissez-Faire)
Consumers are NOT protected by unfair business practices such as monopolies.
Goods are produced to meet public demand (supply & demand).
Private businesses produce goods for profit

8. Market ECONOMY Con’t Examples:
Capitalism– Economic decisions for production are made by people and are based on profit motive.
No current nation has a true market economy

9. Market ECONOMY Con’t Role of Government
In a true market economy, Government has very little or no involvement; it does not regulate business, nor does it protect consumers

10. Mixed ECONOMY Definition: Characteristics:
Relies on a combination of all the other three economic systems
Characteristics:
People CHOOSE what they buy and sell.
Competition is encouraged.
Government regulates business to protect consumers
Supply & demand dictate what are produced
Sellers motivated by profit

11. MIXED Economy Con’t Examples: Capitalism United States
Most of the countries in the world have some sort of mixed economy

12. MIXED Economy Con’t Role of Government
In a mixed economy, Government sets up regulations in order to protect consumers (break up monopolies; establish minimum wage; create laws to limit pollution, etc…)