1. Economic Systems
Spring Semester 2018
Rixie

2. Always remember…
Economics is the study of choices related to resources, production, and consumption

3. 4 Types of Economic Systems
Command
Market
Traditional
Closed

4. Create social equality
#1 Command Economies
Characteristics:
Centrally operated by government, which:
Prohibits personal property
Decides what is made
Controls prices and supplies
Major Goal:
Create social equality

5. Characteristics: Major Goal: #2 Market Economies
Pure Market Economy:
No gov’t intervention
Mixed Market Economy:
Combo of command & pure market
Some gov’t intervention
Producers & consumers can make economic decisions
Major Goal:
Promote free economic choices

6. #3 Traditional Economies
Major Goal:
Preserve traditional customs
Characteristics:
Based on traditions/customs of family/community
Center on barter/trade (not $)
Hunting, gathering, farming

7. Characteristics: Major Goal: #4 Closed Economies
Maintain self- sufficiency
Characteristics:
Restrict trade with international partners
Isolation from rest of the world

8. Quick Quiz The most common economic system in the world is a
closed economy.
command economy.
mixed market economy.
traditional economy.

9. Quick Quiz What is one example of a closed economy?
a barter system that does not rely on money or other currency
a restricted system that blocks trade with international partners
a trade-based system that encourages the flow of goods and services
an old-fashioned system that preserves traditional choices and customs

10. Quick Quiz The goal of a command economy is to
sustain self-sufficiency.
preserve traditional customs.
create equality within a society.
promote free economic choices.

11. Governments & Economic Systems
The more involved a gov’t is in the economy, the more restrictive that economy will be

12. Command Economies: Socialism
Gov’t can control factories/means of production
Citizens may often own homes, but not businesses

13. Command Economies: Communism
Focus on promoting social/economic equality
The state:
Owns property
Employs workers

14. Mixed Market Economies: Republics
Provide many freedoms
Elect representatives
Citizens can:
Change jobs
Own businesses
People provide their own necessities

15. Comparing Command & Mixed Market Economies
Pros
Cons
Gov’t may provide necessities for citizens
Tough to start a business
Independence & choice
Citizens pay for necessities
Smaller income gap
Tough to become rich
Greater opportunity to gain wealth
Larger income gap
High taxes
Employment not guaranteed

16. Quick Quiz A mixed market economy tends to exist under a
communist government that provides little regulation.
democratic government that provides some regulation.
representative government that provides no regulation.
socialist government that provides a lot of regulation.

17. Quick Quiz In a communist command economy, workers are employed by
the agencies.
the consumers.
the producers.
the state.