2. Economic System
It is the way resources (factors of
production) are controlled within a
nation and how they are distributed
among the nation.
How these factors of production are
controlled and distributed defines the
economic system
3. Command vs. Market
Economy
Command Economy
Market Economy
Government is not
Government
involved.
manages all
or most of the Resources
distributed
resources
based on supply
and industries and demand
6. Market Economy
1. Capitalism
Government is not
involved;
The market is the
mechanism of exchange of
goods and services
Private ownership
7. Advantages/ Disadvantages
Command Economy
• High government
control
• Equal distribution
• No rich no poor
• Communal
ownership
•
•
•
•
Market Economy
No government
control
Unequal
distribution
Increased gap
between the rich
and poor
Private ownership
8. Mixed Economy
A system featuring both
command and market
economies
Most countries in the world
are mixed economy