Economic systems
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Economic systems Presentation Transcript

  • 1. Economic Systems
    Chapter 7
  • 2. Capitalism (Market Economy or Laissez-Faire, free enterprise)
    Capitalism-economic system in which the means of production are privately owned and operated for profit
    Businesses are privately owned
    Little to no government involvement
    Supply and demand determine prices
  • 3. Capitalism continued
    Example:
    If you own a shoe store, you determine the price of your shoes based on the cost to you and how much people are willing to pay. If people are willing to pay a lot for your shoes, you make a profit, if not, you could lose your business.
  • 4. Socialism (Planned Economy)
    Socialism- system in which the people as a whole rather than private individuals own all property and operate all businesses.
    Some government control
    Some businesses are privately owned, but utilities and production is owned by the government
    Pay more in taxes, but people receive more benefits from the government such as education, health care, etc.
  • 5. Socialism continued
    Grew out of Enlightenment ideas and the focus is on the good of society
    Believe that capitalism creates a gap between the rich and the poor
    Many European countries have a socialist economic system
  • 6. Mixed Economy
    Mixed economy- economic system with both private and state-run enterprises
    A “mix” between capitalism and socialism
    Some say the US really has a mixed economy since our government does own some businesses
    Example: post office, city of Wichita (water)
  • 7. Communism (command economy)
    Communism- form of socialism in which there is no class system and all businesses are controlled by the government
    Complete government control of businesses
    Also, often repress people’s individual rights
    Never existed in it’s true form
  • 8. Communism continued
    Examples
    Russia (not today)
    China
    Usually referred to as a “one-party” system