ECONOMIC SYSTEMS

THE 4 ECONOMIC SYSTEMS

• Traditional
• Market (free)
• Command
• Mixed

TRADITIONAL ECONOMY

• The people do things the way they have always been done
• The people decide what goods and services will be produced and how they will be provided.
• Everyone gets a share of what is being produced
• The people within the economy own the factors of production
• The traditional economy is still found in Canada by a group named the Inuit.

ADVANTAGES

• Theirs no restricted government
• You can follow your culture and religion
• Everyone has a role in the traditional economy

DISADVANTAGES

• Do not adopt easy to change
• Lack of growth
• Limited amount of resources

MARKET ECONOMY

• Can also be called a free market economy
• The consumers and producers decide what goods and services are produced
• The consumers and producers decide how they will be provided
• Individuals and privately owned business own the factors of production
• Brazil is an example of a market economy

ADVANTAGES

• Citizens has a choice in decision making
• The market regulates itself
• The people have competition within the economy

DISADVANTAGES

• No regulations
• No safety net (no pretection for the consumers)
• Unhealthy competitions

COMMAND ECONOMY

• The government controls the whole economy
• China has a command economy

ADVANTAGES

• Everyone has to work
• Efficiency
• High production rate
• Fixed pricing
• Safety net

DISADVANTAGES

• Low standard of living
• Corruption
• No freedom

MIXED ECONOMY

• The consumers, producers, and government decided who will produced and provide the good and services.
• An example of a mixed economy is the USA

ADVANTAGES

• High standard of living
• Personal freedom
• Safety net

DISADVANTAGES

• Have to maintain balance
• Loss of trade