Economic Systems Continuum - Weebly€¦ · Israel - For whom to produce? The private sector...
Transcript of Economic Systems Continuum - Weebly€¦ · Israel - For whom to produce? The private sector...
Traditional Economy - Advantages
There is little to no uncertainty
Everyone knows what role to play
Life is generally stable, predictable, and continuous
Security in the way things are done
Traditional Economy - Disadvantages
Tend to discourage new ideas and new ways of doing things
Lack of progress lowers standard of living
Technology is not used; difficult to improve
Lack of individual choice/freedoms
Command Economy - Advantages
Economies can change rapidly on government command
Whatever is needed most will be produced
No uncertainty (people are told when and how to work)
Free education, health care, and other public services
Command Economy - Disadvantages
Economy designed to meet needs, not wants
No incentive to work hard as people rarely lose their job
No reward for initiative, which slows progress
Pure Market Economy - Advantages
Adjusts to change based on consumer wants
High degree of individual freedom
Low levels of government interference
Anyone with money has a voice in the economy
Wide variety of available goods & services available
Competition in the market leads to better products
Pure Market Economy - Disadvantages
Poverty: only those with money can participate
Market does not provide for people’s basic needs.
High degree of uncertainty: people lose jobs; businesses fail
Puts profit before people
Rift between wealthy and poor
Typically becomes anarchy
Mixed Economy - Advantages
Government can decide how involved, or uninvolved, they wish to be to best serve their people
Government can provide the needs for their people while the people provide for their own wants
Israel - What to produce?
A large portion of Israel’s GDP (Gross Domestic Product) comes from high tech manufacturing, financial services, and agriculture
Israel - How to produce?
Israel has substantial (a lot of ) government ownership of business, but is gradually privatizing (people own) companies
Israel - For whom to produce?
The private sector produces goods and services for domestic and international markets based on the market price system
Saudi Arabia - What to produce?
Saudi Arabia is the world ’s leading producer of oil
The Saudi government continues to invest in industrial production
Leaders in petrochemicals, mining, and refining
Saudi Arabia - How to produce?
95% of oil production is controlled by the government
Relies heavily on specialized labor from other countries (1/3 of labor force)
Since 1980s, has been trying to increase private & foreign ownership
Saudi Arabia - For whom to produce?
1/3 of GDP is based on exports
This is due to the economy’s reliance on the oil sector
Turkey - What to produce?
Turkey has a diversified economy with large service, manufacturing, and agricultural sectors
Turkey - For whom to produce?
1/5 of Turkey’s production is exported
Remainder consumed by domestic consumers and the government