Transcript Economic Systems - ePortfolio Home Page

Economic
Systems
Ms. Ramos
Alta Loma High School
In truth, all economics
today are
Mixed
The economic system in
which children are likely
to carry on the economic
roles played by their
parents is called a
Traditional
economy
In his book Wealth of
Nations, Adam Smith
explained how
Markets
regulate
economic activity
The economic condition
that exists between
businesses that sell the
same product is called
Competition
A contract is an
agreement that is
Legally
binding
Economies that are
closest to the pure
market model are
classified as
Capitalist
Ownership of private
property is a
characteristic of
Free
enterprise
The economic system
in which the
governments role is
most limited is
Capitalism
In the circular flow
model, the exchange of
goods and services in
the economy are
represented by the
Product
market
The standard of living
Is
measured as how much
on average ever person in a
country is able to consume
in a specified period of
time.
Insuring bank
deposits is an example
of the pursuit of the
goal of economic
Security
Scarcity of resources
leads the U.S.
economy to pursue the
goal of the economic
efficiency
If the number of workers in the
population grows faster than
the average production of each
worker, the standard of living
will
Fall
System where the
government/powerful
ruler decide prod and
consumption
Command
economy
System were the
government and
individuals are
involved in prod and
consumption
Mixed economy
System where the
means of prod are
mostly privately
owned and operated
for profit
Free market
The way a country
sets up the production
and consumption of
G&S
Economic
system
System were the
producers and
consumers make econ
decisions
Market
economy
Income when one sells
or rents a factor of
production
Factor
payment
System where
custom/ tradition
determines production
and consumption
Traditional
economy
Who
gets what?
How do societies
decide?

Every society is faced with three
economic questions: What goods and
services should be produced? How
should they be produced? Who should
get what is produced? How a society
answers those questions depends on its
economic goals. These goals include
economic freedom, efficiency, equity,
growth, security, and stability.
 L2: What? How? For whom?
 L3: Need 5: economic freedom,
efficiency, equity, growth, security, and
stability
How
do mixed
economies divide
the decision
making?



Most countries today have a mixed
economy, in which both the govt and indiv
have a voice in economic decisions. Who
decides what varies greatly. Some
countries, incl the US, min govt regulation
of the mkt. Others, like China, still
exercise considerable govt control over
economic activities.
L2: authoritarian socialist (Communist),
capitalist, democratic socialist
L3: auth soc: Govt owns/controls almost all
factors of prod-command), capitalist: Indiv
own factors of prod- market, dem soc:
Govt owns some factors of prod- lmt key
industries: elec, phone- market
What
are the key
characteristics of
the US economic
system?
L2: Need 5: economic freedom, limited
government, competition, binding contracts,
equal opportunity, profit motive, and property
rights.
 L3: economic freedom (Laissez-faire/choose
job, live, products), limited government
(regulates w/o controlling indiv, firms, or
mkts), competition (Firms are free to
compete- benefits the consumer), binding
contracts (Right to enter & legal), equal
opportunity (Legal right to seek education &
compete in marketplace), profit motive
(Provides incentive to work and create new
businesses), and property rights (Right to
sell, buy, & control the use of our “property”).

STUDY!!!