1. Economic Spectrum and Systems
Free Enterprise, Socialism, Communism
10A: Describe the forces that determine the distribution of goods and services in free enterprise, socialist, and communist economic systems.
10B: Classify where specific countries fall along the economic spectrum between free enterprise and communism.

2. Modern Economic Spectrum
Free Enterprise
Socialism
Communism
less government
more government
We can classify where different countries fall on a spectrum between free enterprise and communism.

3. 1. What goods and services should be produced?
The Three Basic Economic Questions help determine where on the economic spectrum a country will fall
1.   What goods and services should be produced?
2.  How should those goods and services be produced?
3.  Who consumes these goods and services? 

4. The Economic Spectrum
A country’s economic system can be classified along an economic spectrum. How they answer the 3 economic questions determines where they are placed on the spectrum – closer to a Capitalist/Free Market/Free Enterprise system, a Socialist system or a Communist system.
Most economies fall somewhere in between systems, showing that they have characteristics of both.

5. Your turn
Your group has a country card with a description of its economy.
Discuss where on the spectrum your country would fall.
When instructed, send a representative to the spectrum posted on the wall. Your representative will stand at the point on the spectrum where the economy falls.

6. Sample Economic Spectrum
What does the position of the countries on the spectrum tell us about the economy of each?
In which country, South Korea or North Korea, does the government have more control over the economy?
In which country, Mexico or Cuba, does the private sector have more control over the means of production?
In which country, Venezuela or the United States, do the consumers determine what is produced?
Sample Economic Spectrum
United States
United Kingdom
South Korea
Mexico
France
India
China
Venezuela
Cuba
North Korea
Free Enterprise
Socialism
Communism

7. 9. Economic Spectrum Free enterprise Socialism Communism India Cuba
Mexico
France
China
Venezuela
South Korea
United States
North Korea
United Kingdom
2011 Index of Economic Freedom based on the following:
Business Freedom Trade Freedom
Fiscal Freedom Government Spending
Monetary Freedom Investment Freedom
Financial Freedom Property Rights
Freedom from Corruption Labor Freedom

8. Economic Spectrum Assessment. Everyone answers #1 (40 points)
Economic Spectrum Assessment. Everyone answers #1 (40 points). Then choose 4 additional questions (15 points each).
points. You are a small businessman. Which country would be the best for you to start a new business? Explain which economic, political, and social factors influenced your decision. Include difficulties and strengths of the nation that you might encounter in the nation you chose? Choose 4 of the following questions. Each question is worth 15 points. 2. In which country could the government make the quickest changes to the economy? Explain why. 3. Which countries would produce more luxury items? Explain why. 4. Which countries would have the widest gap between rich and poor? Explain why. 5. In which countries would most of their people fall within a similar income range? Explain why. 6. Which countries would offer the widest variety/choice of products (ie: umbrellas in several sizes, colors/patterns?). Explain why. 7. Which countries would depend on competition to create better products? Explain why. 8. In which countries would the prices for goods be determined by the consumers? Explain why.

9. United States
The consumers in the United States of America, through their demand for high-quality products, control the production of goods.
Most businesses are owned by private individuals or corporations and not the government.
However, the government does provide a few programs such as social security and Medicare to citizens that are in need.

10. United Kingdom
People who live in the United Kingdom enjoy an economic system in which private citizens have freedom of choice when selecting consumer goods.
Famous companies like Bentley Motorcars, Cadbury Chocolates, and British Airways listen to the demands of the people and what they want provided to them.
The role of the government/E.U. is to oversee safety requirements of the privately owned companies. The National Health Service of England provides basic healthcare to all citizens with private healthcare increasing in recent years.

11. South Korea
South Korea is nicknamed one of the “Asian Tigers” due to its fast-moving industrialization.
It has benefited from private ownership of businesses, where private citizens can directly profit from their labor without too much government intervention.
Because of the success of private ownership, less people now rely on the government to provide for their needs.

12. Mexico
Mexico has the 15th largest nominal GDP in the world. Free trade, such as the North American Free Trade Agreement (NAFTA) allows for distribution of goods into markets outside of Mexico, bringing in profits for both private and government owned businesses.
Even though much wealth can be found for some, many still rely on the government to provide for their basic needs.

13. France
In France the distribution of goods is determined by both market demand and government/E.U. control.
Land, labor, and capital are managed by the government through taxes paid by the citizens.
The people of France receive their basic needs, education, retirement, and medical care by the government though high taxes the people pay, thereby creating a sense of equality between the government and the people.

14. India
In India major factors of production are outlined by the government even though citizens are free to own their own businesses.
Some Indians rely upon the government to provide basic needs. Some earn enough money to provide for themselves.
The distribution of goods is determined mostly by the government of India with some consumer demand in regard to needs and wants.

15. China
The decision behind the allocation of goods is provided by the government of the Chinese people.
Government guidelines dictate who has what job and which companies have access to the country’s resources.
The people of China look to the government for many of their basic needs.

16. Venezuela
President Nicolás Maduro and the government of Venezuela provides ALL basic needs for its citizens.
There are businesses in the country that are allowed to make profits for themselves, although many government-owned companies exist.
Venezuela has the 49th largest nominal GDP in the world

17. Cuba Fidel Castro ran Cuba from the 1950s and into the 2000s.
Castro has now handed over power to his brother, Raul Castro, and since then no more economic control was given to the people.
The government controls all factors of production and provides for all the needs of the people.
Cuba has the 66th largest nominal GDP in the world

18. North Korea
In North Korea, Dictator Kim Jong Un controls ALL distribution of goods, along with ALL the factors of production.
No private individuals are allowed to own their own businesses.
Consumers have no choice in what goods/services are available to them.