2. Economic Systems
An economic system describes
how a country’s economy is
organized.
It is a system of production,
distribution and consumption.
Economic systems influences the way
the nation make economic choices
about how the nation will use its
3. The four economic system
Market Economy
Command Economy
Traditional Economy
Mixed Economy
4. The Market Economy
Individuals control production and allocation
decisions through demand and supply.
This economy is guided by the changes of prices that
occur as the individual buyers and sellers interact in
the market place.
5. The Command Economy
The government makes all the decisions and owns
most of the production.
The government runs all the businesses, controls all
employment, and decides how goods and services will
be produced.
The governmental planning determines the prices of
goods and services or the wages of workers
6. The traditional Economy
This economy is shaped by religion and customs
In this economy people will always make what they
always made and they will do work that they parents
did.
7. The Mixed Economy
It is an economy with both characteristics of command
and market economy.
The government owns and operates only selected
major sources of production.
Businesses own most resources and determine what
and how to produce, but the government regulates
certain industries.
8. Which economy is often used?
1. Market Economy: more individual economy
SUPPLY OUTPUT MARKETS DEMAND
Goods
Services
FIRMS HOUSEHOLDS
• Supply products • Demand products
in output in output markets
markets • Supply resources
• Demand INPUT MARKETS in input markets
resources in
DEMAND Labor SUPPLY
input markets Capital
Entrepreneurs
Physical Resources
Information
9. BIBLIOGRAPHY
Brooke, K. (05/09/2007). Understanding Economic
Systems.
Coil, B. (18/12/2008). Economic systems.
David. (17/10/2009). The Economic Systems.
Stevenish. (08/08/2010). Different types of economic
system.
Yacub. (10/02/2012). Types of economic systems.
