1. Economic Systems

2. Economic System The way people decide to organize production, distribution and consumption. The decisions people must make about production, distribution and consumption are: What to produce? How to produce? For whom to produce?

3. There are different types of economic systems. Each type of system answers the questions differently.

4. Market Economy Economic decisions are made by individuals in their roles as consumer, worker, business owners and savers. Independent business owners seeking a profit produce what consumers want. Independent business owners decide methods of production. How Finished goods and services are distributed to those individuals who are willing to buy them.

5. Traditional Economy Economic decisions generally repeat those made in earlier times or by previous generations. The goods and services produced today are the same as those produced earlier. What Method of production is the same as the previous generation. How Finished goods and services are traded locally for other finished goods and services. Who

6. Command Economy Economic decisions are made largely by an authority such as a government agency. A central planning authority decides what goods and services to produce. A central planning authority determines sites of factories, numbers and wages of employees, methods of production, and quotas for each goods and service. How Members of party in power and other designated individuals receive finished products first. Who