Unit 1, Chapter 1, Section 4

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Unit 1, Chapter 1, Section 4

• Economic Theories
• Mr. Young
• American Government

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Essential Question

• How are the 3 types of Economic Theories
  (capitalism, socialism, and communism) different
  from one another?

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I CAN

1. List and describe the 3 major types of Economic
   Theories
2. Explain what type of economy the United States
   currently has
3. Analyze Karl Marx and his understanding of how
   communism works

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Page 1 Economics

• Study of Human Efforts to satisfy seemingly
  unlimited wants through the use of limited
  resources
• 3 Major decisions
• What and how much should be produced
• How goods and services should be produced
• Who gets the goods and services that are produced

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Page 2 Capitalism

• An economic system providing free choice and
  individual incentives for workers, investors,
  consumers, and business enterprises
• Free market- buyers and sellers were free to make
  unlimited economic decisions
• Adam Smith- Wealth of Nations
• Laissez-Faire-government keeps its hands off
  economy
• Mixed-Market Economy- Free enterprise combined
  with and supported by government decisions (USA)

• 5 main characteristics
• Private ownership and control of property and
  economic resources
• Free Enterprise
• Competition
• Freedom of Choice
• Possibility of Profits

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Page 3 Socialism

• Government owns the basic means of production,
  determines the use of resources, distributes the
  products and wages, and provides social services
• Democratic Socalism where people have basic human
  rights but little control of production or
  ecomony

• 3 main goals
• Distribution of wealth and economic opportunity
  equally among people
• Societys control, through its government, of all
  major decisions about production
• Public ownership of most land, of factories, and
  of other means of production

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Page 4 Communism

• Central government directs all major economic
  decisions no class systems
• Karl Marx- Father of Communism Das Kapital and
  Communist Manifesto
• Bourgeoisie- capitalists who owned the means of
  production
• Proletariat- workers who produce the goods
• Command Economy- decisions made at upper levels
  of government and handed down to managers

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The Cultivation of Cotton by Volkov