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Econ systems


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Econ systems

  1. 1. Economic Systems<br />
  2. 2. Government does not interfere - Consumers and entrepreneurs decide what, how, and for whom to produce – supply & demand <br />Democracy – direct <br />Authoritarian – dictatorship, communist (government ownership)<br />Government has complete authority to decide what, how and for whom to produce – jobs, prices, organization, housing<br />Government decisions are based on traditions and customs which determine what, how and for whom to produce<br />Oligarchy – military or religious group; tribal communities<br />Contains a mix or combination of any of the above economies – Government does make some economic decisions (taxes, social programs)<br />Democracy – representative, parliamentary, presidential, socialist<br />
  3. 3. Tribal communities, Native Americans, the Amish<br />Things are done as they were in the past based on tradition, customs or religion<br />Government controls the factors of production and makes all economic decisions<br />The former Soviet Union, North Korea, Cuba<br />Individuals own the factors of production and consumers, they make decisions without government intervention<br />Great Britain in the 1800s; “Black Market” (unregulated economy)<br />Contains elements of traditional, command and market systems; government does regulate some areas of business<br />USA, Great Britain today, Russia today, Canada<br />
  4. 4. Traditional Economy<br /> In a pure traditional system, the customs and traditions of that culture help answer the three basic economic questions. Longstanding beliefs (customs) create the rules for all economic activity. Religion often plays an important role in a traditional economy.<br />What to Produce? – By custom; the same goods and services that were produced in the past will continue to be produced.<br />How to Produce? – By custom; goods and services will continue to be manufactured, grown and distributed in the same way as before.<br />For Whom to Produce?– By custom; whoever received goods and services in the past will continue to receive them.<br />Examples: Under-developed countries or tribes that have been isolated from the rest of the world [Eskimos in Alaska, Rainforest tribes in South America]<br />
  5. 5. Economic Systems<br />The government decides what should be produced – government owns the means to production<br />By custom – whatever was produced in the past<br />Consumer choices determine the success of goods/services<br />The government does the planning for production: factory locations, decides jobs and salaries, prices on goods<br />By custom – however items were produced in the past<br />Business leaders choose the means of production – The goal is efficiency and making a profit<br />By custom - whoever usually received goods will receive them again<br />The government controls distribution of goods/services: housing locations, transportation system<br />The consumers’ income or wealth determines who receives which goods/services<br />
  6. 6. American GovernmentUnit 1: Types of Government & Economic Systems<br />Matching:<br />Mixed Economy___<br />Traditional Economy___<br />Command Economy___<br />Market Economy___<br />Religious or military leaders<br />Government does not interfere <br />Most systems today<br />Central Authority Decides<br />C<br />A<br />D<br />B<br />
  7. 7. Economic Systems<br />DRILL<br />Fill in the blanks below with the correct Economic System or Type of Government:<br /> Command = ________________ <br /> ________________ = Oligarchy<br /> Market = ________________<br /> ____________ = Representative Democracy<br />Authoritarian<br />Traditional<br />Democracy (direct)<br />Mixed<br />
  8. 8. Economic Systems<br />Identify the type of economic system:<br />Congress passes a law to control the rising cost of prescription drugs. _____________<br />Entrepreneurs were jailed in the former Soviet Union. ______________<br />Mixed Economy<br />Command Economy<br />