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Types of Economic Systems: (Graded) - Coggle Diagram
Types of Economic Systems: (Graded)
*Traditional Economic System
Advantages; less environmental destruction and a general understanding of the way in which resources will be distributed.
Resource
https://www.smartcapitalmind.com/what-is-a-traditional-economy.htm
Disadvantages;
It isolates the people within that economy. ...
Large outside economies can overwhelm a traditional economy. ...
It offers few choices. ...
There may be a lower overall quality of life. ...
It creates specific health risks. ...
Unpredictability creates survival uncertainties.
Mixed Economy
Characteristics
Protects private property
Allows the free market and laws of supply and demand to determine prices
It is driven by the motivation of the self-interest of individuals
Allows the federal government of safegaurd its people and its market
Advantages
Distributes goods anad services to where they are most needed
It rewards the most efficient producers with the highest profit
It encourages innovation to meet customer needs more creatively, cheaply, or efficiently
It automaticcally allocates capital to the most innovative and effivient producer
Disadvantages
If the markethas too much freedon, it can leave the less competitive members of society w/o any government support
The Defense industry could become a government-subsidized monopoly or oligarchy system
This can cause an increase of the country's debt
The government could protect the free market so much that it doesn't regulate enough
What Is a Mixed Economy
Free market economy
Characteristics
No government intervention in the economic system, including no legislative control over employment, production or pricing. ...
Supply and demand drives production, the use of resources and sets prices.
All goods and services are produced in the private sector.
Advantages
Efficient Allocation of Resources. The free market allows for supply, demand, and prices to all work in tandem. ...
Competition. ...
Innovation and Economic Growth. ...
More Choice. ...
disadvantages
excessive power of firms
unemployment and inequality
merit goods
poor quality
What Is a Free Market Economy? | GoCardless
https://gocardless.com
Command Econmy
What Is a Command Economy? - The Balance
https://www.thebalance.com
› ... › Economic Theory
CHARACTERISTICS
The government creates a central economic plan. ...
The government allocates all resources according to the central plan. ...
The central plan sets the priorities for the production of all goods and services. ...
The government owns monopoly businesses.
Advantages
-guarantees equal standard of living for everyone
-less crime and poverty (ideally)
-needs are provided for through the government
Disadvantages
-Fewer choice (lack of competition by producers) -Shortage of consumer good/services
-low economic growth
-limited innovation
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Compare and Contrast the command economy w/ the free market economy
Similarities -everyone is encouraged to work
Similar economic players including
Link Title
Differences
-Market has private ownership of property while Command has government ownership of property
-Market has economic freedom while command does not
-Market have incentives while command does not
-Market has unequal wages while command has equal wages
-market is based on division of labors
-Market bases prices off supply and demand while command is based from government decision makers
