Embed Size (px)
Citation preview
World Economic Systems
Factors of Production
These are the three fundamental questions that determines the economic system:
1. What should be produced?2. How should and how much should be
produced?3. Who should get it and at what cost?
Traditional Economy
Also known as subsistence economy.
Nearly all goods and services are produced by the people are consumed in their own nation within families and villages.
Market EconomyAlso known as free enterprise.Private individuals and private groups decide
and control what goods are produced, how many goods are produced, and what they cost.
This is determined by the law of supply and demand.
An example of this economy is capitalism.Gov’t plays little or no role in this type of
economy.
Command EconomyEconomy is controlled by a single, central
gov’t.All economic decisions are made by the
gov’t.Communism is the best example of this
type of economy.Gov’t planners decide what is produced,
how many will be produced, and its cost.
Mixed EconomyAn economic system that has two or
more different characteristics from the previous economic types.
An example is socialism…designed to be equal with gov’t regulations and private groups and individuals controlling economic decisions.
Economic Spectrum
