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Types of-economic-systems
There are three basic types of economic systems: traditional, command, and market. Most textbooks say the most common system throughout the world is mixed, which is a blending of two systems rather than a system itself. The type of economy a country has depends on the extent of government involvement in economic decision making. Examples are given of different countries and the percentage of public vs private sectors, with most modern economies being mixed. The three basic economic questions are what to produce, how to produce, and for whom to produce.
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Types of-economic-systems
- 2. • How manybasic types of economic systems are there? • Name the economic systems. • Which economic system do most textbooks say is the most common throughout the world?
- 3. • How manybasic types of economic systems are there? 3 • Name the economic systems. Traditional, Command, Market • Which economic system do most textbooks say is the most common throughout the world? Mixed. The GCEE states that mixed is not an economic system but rather a blending of two different types of systems.
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- 5. What determines whichtype of economy a country has? • The type of economy is determined by the extent of government involvement in economic decision making. COPY ALL
- 6. Traditional Economy 1. Allocationof resources is based on rituals, habits, or customs 2. Roles are defined by family 3. People work together for the common good 4. Little individual choice
- 7. Free Market Economy 1.Private ownership of property/resources 2.Business decisions are driven by the desire to earn a profit 3.There is a great deal of competition. 4.Consumers have many choices
- 8. Mixed Economy 1. Individualsand businesses as decision makers for the private sector 2. Government as decision maker for the public sector. 3. A greater government role than in a free market econom 4. Most common economic system today Examples: England, Germany, Russia
- 9. Command Economy 1. Centralownership of property/resource 2. Centrally planned economy 3. Lack of consumer choice Example: Cuba and Former Soviet Union
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- 13. Three Basic EconomicQuestions • What to produce? This question asks what people will make and sell. Many countries produce goods or services based on which resources are available and which will make the most money for the lowest cost. A country's type of economy usually has less influence on this question than it does on the other questions. • How to produce? This question asks how people will make a good or service. Manufacturing is a way to produce. Sometimes production is outsourced, or sent to other countries, in order to keep cost down. Downsizing reduces the number of employees, also allowing cost to be kept down. • For whom to produce? This question asks whom goods are services will be made for. People in market economies will produce for a target market. This will allow them to make the greatest profit.
Editor's Notes
- #11 6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
- #12 6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
- #13 6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.