Types of Economies. Reid Risinger. Economic Systems. An economic system is the system of production, distribution and consumption. There are three main types of economic systems that are used throughout the world. Command Economy Market Economy Traditional Economy. Command Economy.
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Types of Economies Reid Risinger
Economic Systems • An economic system is the system of production, distribution and consumption. • There are three main types of economic systems that are used throughout the world. • Command Economy • Market Economy • Traditional Economy
Command Economy • Economy where supply and price are regulated by the government rather than the free market. • Government planners decide what goods and services will be produced and how they will be distributed. • The Government also decides the price at which the goods will be offered for sale.
Command Economy… • This is sometimes called a “Centrally Planned Economy”. • The Command Economy is an important part of communist societies.
Examples of Command Economies • China • North Korea • Cuba • Former Soviet Union
Market Economy • Economic decisions and the pricing of goods and services are determined by the interactions of a country's citizens and businesses. • Prices of goods and services are set by supply and demand. • Opposite of a command economy where government decisions drive most aspects of a country's economic activity.
Market Economy… • Little government intervention or central planning. • System of choice in today's global marketplace. • Capitalistic economy.
Examples of Market Economies • USA • Canada • UK • Germany
Traditional Economy • Very underdeveloped economy that often depends on agriculture as its main base. • Traditions, customs and belief systems determine its operation. • Also known as a subsistence economy. • Countries that use this are often rural and farm based.
Traditional Economy… • Hunting, gathering, and cultivation are the main tasks. • Often this economy is associated with poverty. • May have no currency.
Examples of Traditional Economies • Third-world countries. • Inuit Indian tribes in Northern Canada.
Works Cited • http://www.investorwords.com/951/command_economy.html • http://www.investopedia.com/terms/c/command-economy.asp#axzz25nAedqYD • http://www.investopedia.com/terms/m/marketeconomy.asp#axzz264a6f0Wb • http://www.wisegeek.com/what-is-a-traditional-economy.htm • http://www.powellcenter.org/principle4.asp • http://www.docstoc.com/docs/33563607/THE-SOVIET-CENTRALLY-PLANNED-ECONOMY • http://home.comcast.net/~diazseniorspresent/index.htm • http://www.ehow.com/info_8669639_advantages-disadvantages-traditional-economies.html