ECONOMIC%20SYSTEMS

1
ECONOMIC SYSTEMS
2

• Throughout history, people have organized
  economic systems to meet their wants and needs.
  In the study of economics, people must make
  decisions as to 1) What to produce? 2) How to
  produce it? and 3) For whom shall the goods and
  services be produced? The basic economic systems
  are traditional, command, market, and mixed.

3
TRADITIONAL

• Based on traditions and customs

4
TRADITIONAL

• Major Features
• Based on agriculture
• Limited barter trade
• Example
• Neolithic Civilizations
• Early River Valley Civilizations

5
MARKET

• producers and consumers determine WHAT, HOW, and
  FOR WHOM to produce
• (CAPITALISM)
  

6
MARKET

• Major Features
• Based upon Supply and Demand
• Usually focus on consumer goods
• Little government control
• Example
• United States

7
COMMAND

• a central authority determines WHAT, HOW, and FOR
  WHOM to produce
• (COMMUNISM)

8
COMMAND

• Major Features
• Controlled by strong, centralized government
• Usually focuses on industrial goods
• Little attention paid to agriculture and consumer
  goods
• Example
• Communist Soviet Union

9
MIXED

• Combination of Market and Command economic systems

10
MIXED

• Major Features
• Combination of Market and Command economic
  systems
• Market forces control most consumer goods
• Government directs industry in need areas
• Example
• Germany

11
MERCANTILISM

• building a nation's wealth by exporting more
  goods than it imports

12
MERCANTILISM

• Major Features
• Colonies supplied their parent nations with raw
  materials that were used to produce finished
  goods, and then exported back to the colonies.
• Example
• Spanish Colonies in New World

13
SOCIALISM/COMMUNISM

• state control of the economy

14
SOCIALISM/COMMUNISM

• Major Features
• Government control of all property and means of
  production
• Example
• Soviet Union