Please enable JavaScript.
Coggle requires JavaScript to display documents.
Types of economic systems by Yandel Pichardo - Coggle…
Types of economic systems
by Yandel Pichardo
Market Economy
Examples: Flea market/ Farmer's market/ Ebay
Characteristics
1.No government involvement in economic decisions.
2.Private firms account for all production
Advantages
The consumers decide what should be produced.
The businesses determine how the products will be produced
Disadvantages
Difficulty enforcing property rights (no laws).
Some firms try to monopolize markets, conspiring and price fixing.
Resource
Command Economy
North Korea & USSR
Characteristics
The government or other central authority makes all economic decisions.
2.Individuals have little, if any, influence over economic functions
Advantages
Can ensure stability because it does not coincide with other businesses.
Serves people collectively instead of individuals; focus on equality.
Disadvantages
Often there is insufficient resource distribution, ie shortages and/or other surprises
Cannot determine societies objectives and consumer preferences as well as the market can.
Resource
Traditionally Economy
Examples: Eskimo, amish
Characteristics
Resilient to change
Old-fashioned
Advantages
Stable, predictable and continuous life.
Customs and traditions determine who is provided for.
Disadvantages
Individuals are generally not free to make decisions on occupation.
Discourages new ideas, new technology and new ways of doing things, leading to stagnation and lower standard of living.
Resource
Mixed Economy
Japan & Germany
Characteristics
Combines elements of pure market and command economies; government and individuals share the economic decision making process.
Government guides and regulates production of goods and services,
Advantages
Can focus on social welfare and political freedom, as well as individual liberties.
Disadvantages
May not lead to optimal use of resources
Government intervention can hinder progress.
Resource
