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Types of Economic Systems - Coggle Diagram
Types of Economic Systems
Limited Sources
Limited sources economy exist because of a finite amount of labor, capital, land, and etc.
Limited sources enomony is when a type of economy wich the number of productive resources to the economy are finite (have a limit).
One country that use the limited sources is Singapura that is located in South Asia.
Socialism
Socialism main goal is to keep prices low and give jobs and services for a lot of people. Socialist countries often tend to have more social services.
The government takes control of main industries, most of them are related to telecommunications, mining, transporting and banking
Socialism ideas are related more to production for using than from profiting. There is no competitive buying neither selling in the market.
China and Cuba are very good examples of Socialist countries
Market
The government has no power in economic decisions, because supply and demand regulate the economy. Private firms account for all production, and all resources are owned by individuals.
Businesses determine the way the products will be produced. Richer people are able to buy more products and services. Consumers choose what will be produced, because of their purchases.
The United States is an example of country that uses this system.
Traditional
Separate by the distinctions of hereditary rank, profession or health. Latin America use the agriculture and mining.
One good example is in India because there they have a caste system that restrict all the occupational choices. That is a social class separated from other distinctions.
The traditional economy starts by the customs and the religion.One good country that use this is South Africa.
Worker Incentives
Economic incentives ara basicaly rewards that influence the citizens by behavior delivering financial motivation that happens in the world.
It can be anything related to cash like discount, cash back or a move with an indirect monetary value like selling complementary products.
One that use this type of work incentive is Sweden, that have a lot of benefits.
Capitalism
Capitalism features a private ownership of business and market competition. It is the same as a free enterprise system
The political system most associated with capitalism is democracy.
Labor division can be found in capitalism. Depending on your specialization you might earn more or less and be more recognized.
Scandinavian countries (Norway, Sweden and Denmark), English speaking countries (U.S. Canada and Australia)
Mixed
A mixed economy is a system wich combines both aspects of captalism and socialism. It protects private property and allows a level of economic freedom in the use of capital and allows to interfere in economic activities to achieve social aims.
UK, Australia and France are countries wich are very known for it's economy. All countries GDP more than 20% makes part of the public sector size.
Most countries are considered to have mixed economies. Almost every country can be considered a mixed economy, it is difficult for a country to sustain economic activity without some degree of government intervention or market activity. Even North Korea and China allows a limited number of private markets.
Command
Cuba is a country that uses this system.
In the command system, the government owns all resources and runs all business. Also, it is responsible for all the employment, and decides how products and services will be made. It also decides who will receive the goods.
A dictator or a group of officials decide what products need to be produced.