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Economic Systems

Economic Systems. Written by Ashley Hopkins and Frank Flanders, Ed D Resource Network 2010. Objectives. Students will be able to list and describe the five major economic systems. Economy Mixed Economy Pure Economy Market Economy Command Economy Capitalism. Communism Socialism

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Economic Systems

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  1. Economic Systems Written by Ashley Hopkins and Frank Flanders, Ed D Resource Network 2010

  2. Objectives • Students will be able to list and describe the five major economic systems.

  3. Economy Mixed Economy Pure Economy Market Economy Command Economy Capitalism Communism Socialism Privatization Transitional Economy Traditional Economy Key Terms

  4. Define Economy • The organized way a nation provides for the needs and wants of its people.

  5. Economic System • Political philosophies that shape the world economies. • Communism • Socialism • Capitalism

  6. Three Economic Questions • All economies must answer these three questions: • What goods and services will be produced? • How will they be produced? • For whom will they be produced?

  7. How are Economic Systems Categorized? • Some standards that are used to distinguish between economic systems are: • Who owns the resource? • What decision making process is use to allocate resources and products? • What types of incentives guide economic decision markets?

  8. Is there such a things as a Pure Economy? • No. • Every economy has influences that make it at least somewhat mixed. • How is the government involved in the U.S. economy?

  9. All economies in the world today are mixed. The economic classification depends on how much a government interferes with the free market. There are three political philosophies that have shaped the worlds economies Capitalism Socialism Communism Mixed Economy

  10. The Three Most Prominent Economic Types Are: • Capitalism • Communism • Socialism

  11. A.K.A. Market Economy This economy is characterized by marketplace competition and private ownership of businesses. Also called a Free Enterprise System Any income derived from selling resources goes exclusively to each resource owner Government in a capitalist society is concerned about the people and cares for those who cannot care for themselves. Democracy Capitalism

  12. A.K.A. command economy. The government plays an authoritarian role in the economy The government controls the factors of production. No private ownership of property or capital. The theory behind communism is that is the government controls and owns everything everyone’s needs will be met and there will be no social classes! Communism

  13. Main goal is to meet basic needs for all and to provide employment for many. The same idea as communism, a classless society Democratic political institutions. Differ from capitalism because of the increased amount of government involvement. Medical care is free Pay much higher taxes Government runs key industries and makes economic decisions Socialism

  14. Other Economic Types • While capitalism, communism, and socialism are the most prominent types there are two others. • Transitional Economy • Traditional Economy

  15. Transitional Economy • It involves converting state-owned enterprises into private enterprises—privatization. • These economies are in transition (changing) from one system from another.

  16. A traditional economy is shaped largely by custom or religion (tradition). Family relations also play significant roles in economic activity. This type of economy ensures that every member of society has a purpose and as well, a participatory function in society. Traditional Economy

  17. Example of Economic Systems & Countries • Capitalism/Market Economy – United States • Communism/Command Economy - Cuba, Libya, Saudi Arabia, Iran, North Korea, and Burma • Socialism- Canada, Germany and Sweden • Transitional Economy - China and the former Soviet Union • Traditional Economy - Brazil and Papa New Guinea.

  18. Review • Economies must answer the following: • What goods and services will be produced? • How will they be produced? • For whom will they be produced? • Five major economic systems are: • Capitalism/Market Economy • Communism/Command Economy • Socialism • Transitional Economy • Traditional Economy

  19. Review Con’t… • Describe the three most prominent economic systems in the world? • Capitalism • Communism • Socialism

  20. Review Con’t… • What are some countries with the following economic systems? • Capitalism/Market Economy – United States • Communism/Command Economy - Cuba, Libya, Saudi Arabia, Iran, North Korea, and Burma • Socialism- Canada, Germany and Sweden • Transitional Economy - China and the former Soviet Union • Traditional Economy - Brazil and Papa New Guinea.

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