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Unit 1. Economic Systems - Coggle Diagram
Unit 1. Economic Systems
- Tradition-based economic systems
In the past, people developed economic systems based on beliefs, customs and laws. For example, in feudal Europe, artisans in cities formed guilds.
Tradition-based societies experienced little change. Preser ving the community was more important than incorpating new pratices that would lead to more economic growth.
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- Capitalism and the free market system
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- Authority: the central planning system
In a central planning system, an authority, generally represented by the state, makes decisions.
In economic such as these, the ultimate aim is to achieve greater social equality and prevent the injustices caused by the unequak distribution of wealth.
Most countries have a mixed economy system. Countries with a mixed economy include Iceland, Sweden, France, the United Kingdom, the United States and Russia.
The free market deals with basic economic problems, but the state as an authority to help guarantee equal oppprtunities.