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Economic Systems - Coggle Diagram
Economic Systems
Market Economy
Disadvantage: Since profit is the single driving motive of businesses, they generally avoid taking measures to protect the environment or increase social services.
Economic Decision-Making: In a market economy, producers and consumers make all the economic decisions. Producers decide what goods and services to offer.
Advantage: When many businesses compete for the same market, they tend to keep prices down to attract consumers.
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Mixed Economy
Disadvantage: The government sometimes strikes the wrong balance. It may either fail to encourage business or fail to protect the people.
Economic Decision-Making: In a mixed economy, individuals and businesses are free to make many decisions. Although, the government makes some decisions to encourage or regulate businesses or to improve people's quality of life.
Advantage: The government can make regulations to protect the environment, workers and the consumers.
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Command Economy
Economic Decision-Making: In a command economy, the government owns/controls all the resources, good, and services, and ultimately makes all the economic decisions.
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Advantage: The government can focus all of its resources on one goal such as China's push to increase economic development.
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