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Different types of economic systems by La'Drevious Roofe, problems…
Different types of economic systems by La'Drevious Roofe
Pure market economy
NO government involvement in economic decisions. Private firms account for all production.
Consumers decide WHAT should be produced. They do this through the purchases they make.
Businesses determine HOW the products will be produced. They must be competitive.
https://docs.google.com/presentation/d/1YzvUvKxrZVBSCtbP20YIH8KE3I6dQ5or/edit?usp=sharing&ouid=108667510301951424659&rtpof=true&sd=true
Problems of the pure market economy:
Some people have few resources to sell - no minimum income.
Some firms try to monopolize markets - conspiring and price fixing.
Pure command economy
All resources are government-owned.
One person (dictator) or a group of officials decide WHAT products are needed.
The government runs all businesses, controls all employment, and decides HOW goods and services will be produced.
Traditional economy
Economy is shaped largely by custom or religion.
Customs and religion determine the WHO, WHAT, and HOW.
Example: India has a caste system which restricts occupational choice. (A social class separated from others by distinctions of hereditary rank, profession, or wealth.)
Problems in the traditional economy There is little waste produced within this economy type because people work to produce what they need. That is also a disadvantage, because if there is no way to fulfill production needs, the population group may starve.
https://docs.google.com/presentation/d/1YzvUvKxrZVBSCtbP20YIH8KE3I6dQ5or/edit?usp=sharing&ouid=108667510301951424659&rtpof=true&sd=true
Mixed economy
https://docs.google.com/presentation/d/1YzvUvKxrZVBSCtbP20YIH8KE3I6dQ5or/edit?usp=sharing&ouid=108667510301951424659&rtpof=true&sd=true
Classification is based on how much government intervention there is.
In the U.S. the government accounts for about 1/3 of all U.S. economic activity.
advantages of a mixed economy include efficient production and allocation of resources, as well as improvement of social welfare.
problems with mixed economies
Encourages Special Interest. ...
High Taxes. ...
Public Monopolies. ...
Reduces Competition. ...
Tendency to lean towards Government control.
Problems with the command community Consumers get low priority.
Little freedom of choice – few products.
https://docs.google.com/presentation/d/1YzvUvKxrZVBSCtbP20YIH8KE3I6dQ5or/edit?usp=sharing&ouid=108667510301951424659&rtpof=true&sd=true
