L.E.Q.: What are the different economic systems?

1. L.E.Q.: What are the different economic systems? Step One: Students will understand the three major types of economic systems.

2. Traditional Economy • A traditional economy is an economy based on custom and tradition. The economic system in which resources are allocated by inheritance, has a strong social network and is based on indigenous technology and methods. • Economy dominated by methods and techniques that have strong social support even though they may be old-fashioned or out of date.

3. Command Economy • An economy that is planned and controlled by a central administration, as in the former Soviet Union.

4. Market Economy An economy that operates by voluntary exchange in a free market and is not planned or controlled by a central authority; a capitalistic economy.

5. More Definitions of a Market Economy • an economy that relies chiefly on market forces to allocate goods and resources and to determine prices • A market economy is an economy based on the division of labor in which the prices of goods and services are determined in a free price system set by supply and demand. ... • An economy in which goods and services are exchanged in a free market, as opposed to a state-controlled or socialist economy; a capitalistic economy

6. Which economic system do most textbooks say is the most common throughout the world? Mixed. The GCEE states that mixed IS NOT an economic system but rather a blending of two different types of systems.

7. Mixed Is Not A Type of Economy Mixed means that a country lies somewhere on the continuum. The more government control a country has in its economy, the closer it is to a commandeconomy. The less government control a country has in its economy, the closer it is to a market economy.

8. Economic Systems Pure Market Pure Command Mixed Economy

9. Step 2: Students should understand how each economy functions to answer: What to produce? How to produce? For whom to produce?

10. In a traditional economic system people usually exchange goods or services rather than use money. Which of the following is an example of this exchange process? • Charging goods on a credit card • Bartering with a seller • Paying for services by check • Using currency to pay

11. In a traditional economic system people usually exchange goods or services rather than use money. Which of the following is an example of this exchange process? • Charging goods on a credit card • Bartering with a seller* • Paying for services by check • Using currency to pay

12. A market economy is very different from a command economy. Which of the following is found in a market economy? • Competition • Guaranteed yearly pay raises • Government control of industry • Government control of agriculture

13. A market economy is very different from a command economy. Which of the following is found in a market economy? • Competition* • Guaranteed yearly pay raises • Government control of industry • Government control of agriculture

14. When a country has a market economy, which of these statements correctly defines this system? • Workers are guaranteed a pay raise every year. • The government controls most of the businesses in the county. • Basic goods in the country are provided to all people without charge. • Companies produce goods of their choice and consumers decide whether to buy the goods.

15. When a country has a market economy, which of these statements correctly defines this system? • Workers are guaranteed a pay raise every year. • The government controls most of the businesses in the county. • Basic goods in the country are provided to all people without charge. • Companies produce goods of their choice and consumers decide whether to buy the goods.*

16. Which term best describes an economic system in which the people-not the government- own land, factories, and businesses? • Communism • Market • Command • traditional

17. Which term best describes an economic system in which the people-not the government- own land, factories, and businesses? • Communism • Market* • Command • traditional

18. Which of the following BEST describes a market economy? • A person can start any legal business and charge any price. • The government provides food and housing to all workers. • The government provides services, such as telephones and television. • National businesses, such as airlines, are owned by the government.

19. Which of the following BEST describes a market economy? • A person can start any legal business and charge any price.* • The government provides food and housing to all workers. • The government provides services, such as telephones and television. • National businesses, such as airlines, are owned by the government.

20. In which economic system are the production and distribution of goods owned by private individuals or corporations? • Traditional • Feudalism • Market • Command

21. In which economic system are the production and distribution of goods owned by private individuals or corporations? • Traditional • Feudalism • Market* • Command

22. You are a small business owner and you sell computer gaming consoles. You decided to sell consoles because they are easy to build, are popular and make a high profit. You decide on the prices for your consoles based only on the following factors:-How many consoles you have in your warehouse, and-How many consoles you sell each weekWhich type of economy do you have? • Subsistence • Command • Market • Closed

23. You are a small business owner and you sell computer gaming consoles. You decided to sell consoles because they are easy to build, are popular and make a high profit. You decide on the prices for your consoles based only on the following factors:-How many consoles you have in your warehouse, and-How many consoles you sell each weekWhich type of economy do you have? • Subsistence • Command • Market* • Closed

24. Economic Systems Pure Market Pure Command Mixed Economy

25. The economic system of communist countries is most closely related to which of the following? Command Market Traditional Supply and Demand

26. The economic system of communist countries is most closely related to which of the following? Command * Market Traditional Supply and Demand

27. Communist A system of government in which the state plans and controls the economy and a single - often authoritarian - party holds power; state controls are imposed with the elimination of private ownership of property or capital while claiming to make progress toward a higher social order in which all goods are equally shared by the people (i.e., a classless society).