Economic Systems An economic system is A system that holds all of the information that travels...

Economic Systems• An economic system is• A system that holds all of the information that travels

through a series of databases that controls our economy.• The method used by society to determine how to use

resources to satisfy peoples needs and wants.• The system that controls the supply and demand of a

society.• A system that controls the world’s production of goods

and services.

Types of Economic Systems

•Free Enterprise•Communism•Traditional

Final or Intermediate Goods• Lumber for a new house• Cloth for making dresses• New factory• Flour for making bread• Cruise Missile

Laissez Faire is?• The French phrase for economic system.• A book that explains the way the market

economies perform.• The doctrine that states that generally

government should not intervene in the marketplace.• The rules followed by every economy in regulating

governmental control.

•Which of the following are NOT one of the three questions a society must evaluate due to limited resources•Where should goods and services come

from?•What goods and services should be

produced?• How should these goods and services be

produced?•Who will consume these goods and

services?

An economy that relies on habit, custom, or ritual to decide what to produce is•Command economy•Market economy• Traditional economy•Mixed economy

Land, Labor, or Capital

• Truck• Grocery clerk• Fish in the ocean• House you rent to tenants• 100 shares of Microsoft stock

Tangible or Intangible Goods

•Cell phone service• Snickers bar•Hair cut•Musical concert•Mountain bike•Massage

The United States of America has •Command economy•Mixed economy• Traditional economy• Laissez Faire economy

Durable Good – Non-Durable Good - Service

Which of the following is an indicator of the economy’s health?• Inflation• Gross Domestic Product• National Income• Trade Balance

GDP = C + G + I + NX• C - Consumption

• G – Government Spending

• I – Investments

• NX – Net Exports

Inflation

A sustained increase in the general price level of goods and services in an economy over a period of time.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in

two successive quarters

Economic Systems An economic system is A system that holds all of the information that travels...

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