ECONOMIC SYSTEMS

TRADITIONAL

ABOUT TRADITIONAL

• Economic decisions are based on beliefs, customs, traditions, and religions
• Used by developing countries, second and third world countries, nomadic tribes
• Where people often exchange goods instead of using money
• Depends on farming, fishing, hunting, gathering

Untitled Slide

Pros:
Tradition is preserved
Little fighting between members
Cons:
Not much profit
Less opportunity for technological growth

MARKET/CAPITALIST

ABOUT MARKET/CAPITALIST

• Economic decisions are made by the free market
• Which means prices are determined by the competition between businesses
• Buyers and sellers have equal access to the market
• Runs on the laws of supply and demand

Untitled Slide

Pros:
Goods are produced efficiently
Innovation
Cons:
Only rewards those who are competitive

COMMAND

ABOUT COMMAND

• The government makes all economic decisions
• Central economic plan is created for the whole country
• Businesses follow the plan instead of responding to the free market
• Society conforms to the government's vision/goals

Pros:
Massive projects can be executed
Can create industrial power
Can meet social goals
Cons:
Difficult to know what the consumers need
Less innovation

MIXED

ABOUT MIXED

• Combination of economic systems
• Allows the free market to determine prices
• Allows the government to interfere in activities
• Government protects the market and owns key industries like aerospace, healthcare, and banking
• Protects ownership of private property

Untitled Slide

Pros:
Rewards the most efficient producers
Governmental role allows growth in important areas
Government support
Cons:
Too much free market can leave less competitive with no government support
Central planning can put the country in debt

THE END

Untitled Slide