Economic system

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Economic system

  1. 1. Economic System
  2. 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. 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
  4. 4. Command Economies 1.Communism The government owns the factors of production and decides how to use the resources.
  5. 5. Command Economies 2. Socialism The government controls the critical but individuals can run noncritical businesses.
  6. 6. Market Economy 1. Capitalism  Government is not involved;  The market is the mechanism of exchange of goods and services  Private ownership
  7. 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. 8. Mixed Economy A system featuring both command and market economies Most countries in the world are mixed economy
  9. 9. Command Economy Communism Market Economy Capitalism Socialism Mixed Economy Combination of both Command and Market Economy

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