1. TYPES OF ECONOMIES

2. TRADITIONAL ECONOMY Economic decisions are made according to long established ways of doing things and are unlikely to change. Example: tribes of hunters Not very common in today’s world

3. COMMAND ECONOMY The government or a central authority owns the factors of production Example: The old USSR, some developing countries

4. Market Economy Private individuals own the factors of production and are free to make their own choices about what to make and buy. Question: Which of the three economies would the United States be?

5. The answer is…… The United States is a market economy. The United States does have some elements of gov’t control for example, the post office, education, military, etc. but is primarily a market economy.