What are the characteristics of different Economic Systems of the World?

Global History and Geography10th Grade Boys & Girls

Friday, September 22, 2017

Economy• It is the system of administration that

determines the modes of Production and usage of goods and services in a country

• Key ideas– Modes of production and usage

– Goods & Services

Types of Economy• Traditional Economy: (Subsistence)

– One that did not change over a long period of time.

– One that supports a family– Examples:

• Traditional farming based economy / SubsistenceFarming

• Trade is barter based

Types…….cont….• Command Economy

– Means of productions and usage of goods and services are controlled by a higher authority which, usually, is a government

– Example: Socialism practiced in communist countries

• Market Economy/Capitalism/Laissez-Faire– Uncontrolled economy– Market Factors: Supply & Demand

Types….Cont…..• Mixed Economy

– Uses any combination of traditional, command and market economy elements.

– Most developing countries have this systems

Characteristics of Market Economy

• Ownership: All Property, including means of production is privately owned.

• Economic Decision: Private Businesses and individuals are free from public control so that they can make basic economic decisions, including what, where, how much, and what prices goods will be produced

• Market Controls: Prices are determined by Supply and Demand. Competition promotes high quality and low prices

Characteristics of Command Economy

• Ownership: The government owns the means of production, distribution and exchange

• Economic decisions: Government officials make all basic decisions, such a s what will be produced, when and where.

• Market Control: The government controls the economy. There is limited productions of consumer goods and an emphasis on industrial growth.

Homework• Write an essay comparing and contrasting

capitalism [market economy] and Communism/socialism [command economy]

Types of Nations Based on Economic Systems

• Capitalist Market Economy nations

• Socialist command economy nations

• Nations with mixed economy