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Transcript of { Types of Economic Systems. Economic System Traditional Economy Command Economy Market Economy ...
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Types of Economic Systems
Economic System Traditional Economy Command Economy Market Economy Mixed Economy
Terms to Know
Economic System – way of determining how to use resources to satisfy people’s wants and needs
Are your needs the same as someone in Israel? Do you want the same things as someone in China? There are different economic systems to meet the
different needs and wants of the people.
Intro to Economic Systems
Every economic system must answer three basic questions:
What goods and services should be produced? How should they be produced? Who will get the goods and how will they be
distributed?
Three Basic Economic Questions
Traditional System is based on traditional customs and religious beliefs passed down for generations.
Command System is when the government controls all factors of production and makes all the decisions
The government even decides what jobs people will hold
Types of Economic Systems
Market Economy (also known as Capitalist)- the government does not intervene. Market is freely chosen activities between buyers and sellers of goods and services.
Mixed Economic System – a combination of all three types of economic systems
Types of Economic Systems
Some decisions are made by individuals reacting to the market
Squinkies Ipods
Federal, state, and local governments make laws regulating areas of business.
Health Inspectors Commercial zones – not shopping centers in a
neighborhood Customs and traditions affect portions of the
economy Christmas, Valentines Day, etc.
In The United States…
Gross Domestic Product (GDP) – the market value of all final goods and services within a country in a given period of time.
Refers to products produced and sold in the same country Hershey is an American candy company, so every
Hershey product made & sold in the U.S. is part of it’s GDP.
Gross National Product (GNP) – the total value of all final goods and services produced by a country’s factors of product and sold on the open market in a given period of time.
Refers to product in one country & sold in another Example: Any Hershey bars sold in Mexico will count
towards the U.S.’s GNP
GDP vs. GNP
http://www.youtube.com/watch?v=1ZTRH-bFomI&feature=related
http://www.youtube.com/watch?v=_hu9i2C7cK8&feature=related
http://www.youtube.com/watch?v=bvdN0IGoHSU&feature=related
Kingdom of Mocha
Typically a government follows one of four types of economic systems: traditional, command, market, and mixed. Explain how each system answers the basic economic questions of what to product, how to produce, and whom to produce for. Include details and examples to support your response.
ECR
Traditional Economy What goods and services should be produced?
Example How should they be produced?
Example Who will get the goods and how will they be distributed?
Example Command Economy
What goods and services should be produced? Example
How should they be produced? Example
Who will get the goods and how will they be distributed? Example
Market Economy What goods and services should be produced?
Example How should they be produced?
Example Who will get the goods and how will they be distributed?
Example Mixed Economy
What goods and services should be produced? Example
How should they be produced? Example
Who will get the goods and how will they be distributed? Examplle
ECR Outline