Please enable JavaScript.
Coggle requires JavaScript to display documents.
The main economic systems (The command economy (centrally directed…
The main economic systems
The market economy (free market economy/free-enterprise system)
Individuals may possess assets
Allocation of resources is affected by free markets
Products & services are supplied by private organisations
Freedom of choice
Minimum state interference
The command economy (centrally directed economic system)
The state owns and controls the community’s resources or factors of production.
Communal ownership of the factors of production
Also known as communism
Individuals do not own land, factories etc.
The profit motive and competition are absent.
The command economy failed because it robbed individuals of the initiative to produce products and services and prevented the creation of wealth.
Socialism
The state controls the principal industries and resources and less important and smaller matters are left to private initiative
Socialism is a compromise between a pure market economy and a pure command economy.
Mixed economies
None of the three main economic systems in use occurs in a pure form anywhere
They occur as mixed economies, with the dominant system incorporating certain characteristics of the other systems