ECONOMIC SYSTEMS. ECONOMIC SYSTEMS. Is the way a society uses its scarce resources to satisfy its peoples unlimited wants. Traditional Economy.
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Is the way a society uses its scarce resources to satisfy its peoples unlimited wants
Where families, clans, or tribes make economic decisions based on customs & beliefs that have been handed down from generation to generation
Goal is survival
Everyone has a set role
Men are hunters & herders
Women cook, tend crops, raise children
Youngest help parents & learn skills
Good of group/society is greater than individual
Government decides what goods and services will be produced, how they will be produced, and how they will be distributed
Government officials (Central planners) consider the resources & needsof the country; distribute those resources according to their judgment
Gov’t usually owns the means of production
Seek to provide for everyone
Leaders use the nation’s resources to produce items that may not make money in a market economy
Workers have little motive to work
Individual rights are under the needs of state
Central planners have little understanding of local conditions (great suffering of lower class)
Shortages are common
Because they often set prices well below that of a market economy.
Because of the human suffering that often goes hand in hand with command economies.
In a Communist economic system, the ____________________ owns the means of production.
Workers get their ________________ from the state, which tend to be low because the state is not worried about making a _________________, just ensuring the basic needs of its people
The government sets the prices of ___________________. They typically set them _________ so that the masses can afford them.
GOODS & SERVICES
Due to low prices of goods and services and low worker productivity, ______________ of goods/services tend to low, therefore resulting in _______________________.
Due to _________ wages and getting paid regardless of worker _________________________, there is little _______________________ to work hard.
Also, due to _________ wages, there is little incentive for people to go on to ________________ for advanced degrees. This leads to a shortage of ________________, ______________, _______________, etc.
These shortages contribute to human suffering. There is a shortage of ___________, ___________________, toiletries, etc.
Based on supply and demand, not government directives
Consumers drive the economy
Producers decide what goods/services they will offer
Government Involvement productivity,
Fundamentals of a Market Economy
Buyers and sellers are free to own and use private property
A financial gain from a business transaction
Sellers are free to attempt to maximize their profits
Sellers are free to attempt to get the business of others by offering the best deal
Consumers are free to purchase what they want and to refuse products they do not want
Buyers and sellers are able to concentrate their efforts in areas where they have an advantage
1723 – 1790
The Wealth of Nations
Laying the foundation for modern economics
Defenders/critics of capitalism
Nation would be wealthier w/free trade
“Invisible hand guides the market place”
1818 – 1883
The Communist Manifesto (1848)
Laid the foundation for socialist economic theory
Russian Revolution 1917
Chinese Revolution 1949
Tension between worker & owner would lead to revolt & create a new classless society “Onion Theory”
An economic system that has elements of traditional, command, and market economies
The public sector, sometimes referred to as the state or the government sector, is the part of the economy that deals with the production, ownership, delivery and allocation of goods and services (also known as PUBLIC GOODS) by the government, paid for by taxesfor citizens, whether national, state, or local
The private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals, usually as a means of enterprise for PROFIT, and is not controlled by the state.
Anyone not going to be here tomorrow, you have to take test today or you will get a zero.
Turn in Spirals #1 & #2
Turn in Globalization in you Life
Work on vocab and review sheet and if time permits Spiral #3