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Economic Systems

Economic Systems. SS7E5 The student will analyze different economic systems. a. Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce.

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Economic Systems

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  1. Economic Systems SS7E5 The student will analyze different economic systems. a. Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce. b. Explain how most countries have a mixed economy located on a continuum between pure market and pure command.

  2. Traditional • Culture (Social roles) decides the answers to the three economic questions. • Command • Government decides the answers to the three economic questions. • Market • People decide the answers to the three economic questions. 3 Basic Economic Systems

  3. What to produce? • How to produce? • Motivation to produce? • Choice of Jobs. • Progress and technology: Is it stressed? • Base Values • Whatever is traditionally produced there. • Traditional ways- how your ancestors did it. • Traditional incentives- Is expected of you. • Custom directed. • No- Not at all. • Customs/ traditional ways and beliefs. Traditional System

  4. What to produce? • How to produce? • Motivation to produce? • Choice of Jobs. • Progress and technology: Is it stressed? • Base Values • Whatever the government decides is the most needed. • Sometimes least cost method- government decides. • Limited social gain. • Government directed. • To some degree. • Moral rewards, social gain, and governmental degree. Command System

  5. What to produce? • How to produce? • Motivation to produce? • Choice of Jobs. • Progress and technology: Is it stressed? • Base Values • Whatever is the most profitable. • The least cost method. • More money- Self gain. • Individual preference. • Yes- Better capital resources helps you produce goods faster. • Competition, material rewards, self-gain, and freedom Market System

  6. A combination of market and command economy. • That is because you either have some freedom or some government control.  For example, a government controls most of your country, but you can still choose what to eat or where to live or to have a family or to choose who you marry. Those are some reasons that you can still have the power to choose some things.  Also if you think you live in a pure market economy but the government might still make decision like to put serial numbers on fire arms or your culture or your traditions. So you really are not living in a pure market or pure command because you or the government has some control. Mixed Economies

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