ECONOMIC SYSTEMS• How we get things is determined by our countries economic system.• Economic systems help people create and obtain goods and services.
THE NEED FOR ECONOMIC SYSTEMS• Needs- basic things we cannot live without. (food, water, shelter, clothing)• Wants- things people want to make their lives more comfortable• (write in examples)
THINK…• Shelter, food, and clothing are all considered basic needs. However, certain types of food, shelter, and clothing can be considered wants. How can we distinguish between the two? (answer in lined space)
TRADITIONAL ECONOMY• Economic decisions are based on tradition.• Barter system.• It is based on agriculture, fishing, hunting, gathering or some combination.• )Write in examples.)
COMMAND ECONOMY• Government makes all economic decisions.• Government owns capital, tools, and production equipment.• Government answers 3 basic econ q’s.• Communist countries tend to have command economies.• Examples: North Korea and Cuba
MARKET ECONOMY• Economic decisions are made by individuals.• People can start businesses to sell any legal products they choose.• Government does not tell people what to produce or buy.• Based on freedom.• Opposite of command economy.• Does not exist in pure form.
MIXED ECONOMIES• Mix elements of different economic systems.• US has a mixed economy because government regulates business.• How does the US government regulate business? (write in examples)