1. Goals: The Students will understand: 1. The four basic economic systems. 2. A socialistic economic plan. 3. Income distribution. 4. The theories of Adam Smith. 5. The theories of Karl Marx. 6. The theories of John Maynard Keynes.

2.  What are the three economic questions? ◦ 1.What goods will be produced? ◦ 2.How will goods be produced? ◦ 3.For whom will the goods be produced?

3.  Mixed  Command  Traditional  Free Market

4.  Free Trade

5.  Under a command economy, government decision makers write economic plans that specify the direction economic activities will take over a certain period of time. ◦ E.g., a five year plan that will determine how many goods will be produced. ◦ A free enterprise economic system would have no such plan. WHY?

6.  Refers to how all the income earned in a country is divided. ◦ In a free enterprise system less attention is paid – although we are hearing more about income distribution in the campaign talk. ◦ In a socialist system government decision makers are more likely to use their powers to redistribute income – directing it from higher earners to those in low income brackets.

8.  Adam Smith – Father of Capitalism and writer of The Wealth of Nations – also known for this theory of the Invisible Hand. ◦ http://viewpure.com/ejJRhn53X2M http://viewpure.com/ejJRhn53X2M  Karl Marx – Father of Socialism and writer of Das Kapital ◦ http://viewpure.com/fSQgCy_iIcc http://viewpure.com/fSQgCy_iIcc  John Maynard Keynes ◦ http://viewpure.com/btRWU_Q50QA http://viewpure.com/btRWU_Q50QA