ECONOMIC SYSTEMS

TRADITIONAL ECONOMY

• Definition: system in which traditions, customs, and beliefs shape the goods and
• the products the society creates.
• Example: India

ADVANTAGES/DISADVANTAGES

• Adv: everyone has a role and everyone is provided for.
• Everyone is equal.
• Dis: no change.
• No room for inivation.
• No protection, or efficiency.

COMMAND ECONOMY

• Definition: economy where supply and price are regulated by the government
• rather than market forces.
• Example: North Korea

ADVANTAGES/DISAGVANTAGES

• Adv: everyone is given a job.
• Stability
• Dis: no choice.
• No freedom, leads to corruption.
• People are not equal.

MARKET ECONOMY

• Definition: economy in which decisions regarding investment, production and distrobution
• are based on supply and demand.
• Example: Hong Kong

ADVANTAGES/DISADVANTAGES

• Adv: economic growth.
• Competition.
• Dis: not everyone gets what they want.
• No protection.

MIXED ECONOMY

• Definition: an economic system combining private and public enterprise.
• Example: cuba

ADVANTAGES/DISADVANTAGES

• Adv: state provides essential service.
• Competition keeps prices low.
• Dis: less efficient than private sector
• Excessive control over business