1. Economic Systems

2. Any Economic System has to answer the 3 main
questions
 What to produce?
 How to produce?
 For whom to produce?

3. Types of Pure Economic Systems
 Traditional Economy
 Command Economy
 Market Economy

4. Traditional Economy
 The three questions are answered through
tradition.( The past)
 tradition determines what is produced
 The production is made for social units such as
tribes
 Still exist in some parts of the Americas and Africa.

5. Command Economy
 This system relies on the government to answer the
three main economic questions.
 Who plan everything in the government are called
the central planners.
 Concerning economic choices normal individuals
have little or nothing to say.
 Such system doesn't exist nowadays but existed in
the old Egyptian kingdom, Also in china a long
time ago.

6. Market Economy
 Individual are the ones who answer the three
economic questions.
 People can buy sell or produce what ever they
want.
 The only form of control in such an economy is the
market.

7. Self Interest
 This concept was introduced by Adam Smith
 If the government was absent in the economy then
the markets will be driven by self interest.
 While individuals worked to reach their own needs
there was an “ invisible hand” that made the people
do what was best for the society.

8.  Incentives: is something that encourages you to
behave in a particular way
 How is this concept linked to what we are studying

9. Mixed Economies
 Since there isn't any pure economies nowadays, its
more becoming to be a mix and match for each
country.
 These mixed economies are classified due to the
extent that the governments in these economies
intervene.

10. The three main types of mixed economies
 Authoritarian Socialism
 Capitalism
 Democratic Socialism

11. Authoritarian Socialism
 Closest to the command model
 It is also called communism
 Government nearly controls all factors of production

12. Capitalism
 Closest to the market model.
 Individuals who own the factors of production and
they answer the three economic questions.
 Government's role is limited to
taxation, education, health and other public services.

13. Democratic Socialism
 Falls between Authoritarian Socialism and Capitalism.
 Government owns some of the factors of
production, most of the time are the things related to
national concern.
 Individuals are able to influence economic planning
through elections of governments officials.

14. attention
Any Questions