2 Every single society has an economic system. The purpose of an economic system is to make and distribute goods and services.The roles of individuals, businesses, and government vary in each system.There are four basic economic systems: Traditional, Market, Command, and Mixed
3 Traditional Economies An economy where people make economic decisions based on their customs and habits.needs and wants are usually established through hunting and farming.This is usually the traditions of their ancestorsCulture is seen as more important than having a strong economy
5 People in traditional economies usually do not want to change their basic way of life. In today’s world, traditional economies are not common
6 Market EconomiesAn economy in which individual consumers and producers make economic decisionsThis type of economy is also called capitalism, or free market.Encourages people to start new businesses by giving them economic freedom
8 Command EconomiesIn this form of government, the central government makes all economic decisionsalso called a centrally planned economylittle or no economic freedoms for individualsproducers and consumers make very few basic economic decisions
9 Mixed Economy In reality pure market or command economies do not exist most societies have mixed economies – different levels of government controlcombines different elements of traditional, market, and command economic systems
10 The United States has about the closest thing to a pure market economy However, it is still considered a mixed economy because of minor government regulationsFor example, the government passes laws to protect the rights of consumersThe government also influences economic growth through jobs and services
11 Countries like North Korea have as close to a pure command economy as you can get, but are still considered mixed.The government controls almost all economic decisions.