MODERN ECONOMIES

THE RISE OF MIXED ECONOMIES

• Laissez Faire- doctrine that states government should not intervene I the marketplace
• Government creates laws protecting property rights and enforcing contracts
• Private Property- property owned by individuals and not the government
• Mixed economies must balance control and freedom

A CIRCULAR FLOW MODEL OF A MIXED ECONOMY

• Government must purchase land, labor ,and capital(factor market)
• Governments purchase goods and services in the product market.(product market)
• The government collect taxes form businesses and households.(transferring money)

COMPARING MIXED ECONOMIE

• Free enterprise- investments are determined in a free market
• Continuum- a range with no clear divisions
• Centrally planned economy and free market are on opposite ends of the economy scale
• Transition- a period of change
• Privatized- sold to individuals

THE UNITED STATES ECONOMY

• It has a free enterprise economy
• It has laws to protect private property
• Foreign investment is encouraged.