Chapter 4
Economic Systems <ul><li>An  ECONOMIC SYSTEM  is the way government and businesses work together to provide goods and serv...
Types of Economic Systems <ul><li>Traditional Economy </li></ul><ul><ul><li>Manner of production and the goods produced ar...
Economic Systems <ul><li>Pure Market Economy (Free Market / Free Enterprise / Capitalist System) </li></ul><ul><ul><li>The...
The Public & Private Sector <ul><li>The  PRIVATE SECTOR  of the market consists of businesses that are privately owned and...
Public-Private Partnerships <ul><li>PUBLIC-PRIVATE PARTNERSHIPS  are common when one sector operates a joint venture with ...
Privatization <ul><li>PRIVATIZATION occurs when a publicly owned company is sold to the private sector. </li></ul><ul><li>...
Impact of Business on the Community <ul><li>Wealth generation </li></ul><ul><li>Job Generation </li></ul><ul><ul><li>Based...
Impact of Business on the Community <ul><li>Standard of living </li></ul><ul><ul><li>Way a person lives as measured by the...
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Economic Systems and Business Impact

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BBI Unit two, chapter 4

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Transcript of "Economic Systems and Business Impact"

  1. 1. Chapter 4
  2. 2. Economic Systems <ul><li>An ECONOMIC SYSTEM is the way government and businesses work together to provide goods and services to consumers. </li></ul><ul><li>The system answers the three basic economic questions </li></ul><ul><ul><li>What to produce? </li></ul></ul><ul><ul><li>How to produce it? </li></ul></ul><ul><ul><li>For whom to produce? </li></ul></ul>
  3. 3. Types of Economic Systems <ul><li>Traditional Economy </li></ul><ul><ul><li>Manner of production and the goods produced are the same as in the past </li></ul></ul><ul><ul><li>Each family produces what they need </li></ul></ul><ul><ul><li>Extra goods are traded </li></ul></ul><ul><ul><li>Today these societies are in very remote areas (ex: Bedouin in the Sahara Desert) </li></ul></ul><ul><li>Pure Command Economy </li></ul><ul><ul><li>Government owns the natural resources, farms, factories, machinery, offices, and most businesses </li></ul></ul><ul><ul><li>Government controls all decision-making including what goods to produce, wages, etc. </li></ul></ul>
  4. 4. Economic Systems <ul><li>Pure Market Economy (Free Market / Free Enterprise / Capitalist System) </li></ul><ul><ul><li>The buyers and sellers control the actions of the marketplace </li></ul></ul><ul><ul><li>Consumer determine what will be produced </li></ul></ul><ul><ul><li>Competition determines how goods will be produced </li></ul></ul><ul><ul><li>Businesses are “free” to establish a place of operation and make a profit </li></ul></ul><ul><ul><li>Consumers are “free” to buy products where and when they want </li></ul></ul><ul><li>Modern Mixed Economy </li></ul><ul><ul><li>Contains elements of both models </li></ul></ul><ul><ul><li>Buyers and sellers control the marketplace and the government plays a role to ensure that the economy operates smoothly </li></ul></ul>
  5. 5. The Public & Private Sector <ul><li>The PRIVATE SECTOR of the market consists of businesses that are privately owned and operated. Their primary purpose is to make a profit. </li></ul><ul><ul><li>Eg. Fortinos, McDonalds, Wal-Mart </li></ul></ul><ul><li>The PUBLIC SECTOR of the market consists of businesses are owned by some level of government (municipal, provincial, federal). </li></ul><ul><li>These businesses operate to provide basic services to Canadians. They usually are not in business to make a profit. </li></ul><ul><ul><li>Eg. Schools, CBC </li></ul></ul>
  6. 6. Public-Private Partnerships <ul><li>PUBLIC-PRIVATE PARTNERSHIPS are common when one sector operates a joint venture with the other sector. This is often used when a large amount of capital is needed but a great deal of regulation is required. </li></ul><ul><li>Eg. The Olympics </li></ul>
  7. 7. Privatization <ul><li>PRIVATIZATION occurs when a publicly owned company is sold to the private sector. </li></ul><ul><li>Eg. Ontario Hydro, Petro-Canada </li></ul>
  8. 8. Impact of Business on the Community <ul><li>Wealth generation </li></ul><ul><li>Job Generation </li></ul><ul><ul><li>Based on: </li></ul></ul><ul><ul><ul><li>Consumer demand </li></ul></ul></ul><ul><ul><ul><li>The business cycle </li></ul></ul></ul><ul><ul><ul><li>Technical improvements </li></ul></ul></ul><ul><ul><ul><li>Competition </li></ul></ul></ul><ul><li>Income Generation </li></ul><ul><ul><li>Sales, interest, investing </li></ul></ul>
  9. 9. Impact of Business on the Community <ul><li>Standard of living </li></ul><ul><ul><li>Way a person lives as measured by the kinds and quality of goods and services that person can afford </li></ul></ul><ul><li>Quality of life </li></ul><ul><ul><li>For the worker, for the community </li></ul></ul><ul><ul><li>Can be positive or negative </li></ul></ul><ul><li>Changing community </li></ul>

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