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Economic systems in asia

Economic systems in asia. What are the 3 basic questions of economic?. What to produce? How to produce? For whom to produce?. The Three Basic Economic Systems. Traditional - People do the same work as their parents; bartering is common.

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Economic systems in asia

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  1. Economic systemsin asia

  2. What are the 3 basic questions of economic? • What to produce? • How to produce? • For whom to produce?

  3. The Three Basic Economic Systems • Traditional - People do the same work as their parents; bartering is common. • Command - The government decides how to answer the 3 economic questions • Market - Individuals decide how to answer the 3 economic questions Traditional Command Market

  4. What is a mixed economy?Is it a separate economic system? • A mixed economic system is not really a separate type of economic system. It is simply a mix of command and market. • Most world economies are not completely market or command. Instead they are mixed. • Countries with mixed economies are on a continuum between pure market and pure command.

  5. How Does China Answer the 3 Basic Economic Questions? • What to produce? • 40% of the Chinese economy is still based in industries run by the government. • 60% of its economy is based on the private sector where producers and consumers make their own production decisions.

  6. How Does China Answer the 3 Basic Economic Questions? 2) How to produce? • Government (state)-run industries are very inefficient, especially in agriculture. This limits China’s economic growth. • In the private sector, economic growth is happening so quickly that Chinese officials are having difficulty controlling consumer safety and environmental pollution.

  7. How Does China Answer the 3 Basic Economic Questions? 3) For whom to produce? • Food must first be produced to meet its peoples’ needs and only the surplus can be exported. However, there is not enough to meet the peoples’ needs. • China exports large amounts of manufactured goods. However, both Chinese and foreign companies are looking at China’s ever-increasing middle class as a growth market.

  8. Place on the continuum: China is slightly on the market side of center. Command_________X______Market

  9. How Does India Answer the 3 Basic Economic Questions? 1) What to produce? • Most Indians rely on subsistence farming to survive. • Since 1991, India has slowly allowed both Indian and foreign businesses to operate. • There is a lot of corruption and bureaucracy involved in starting and running a business.

  10. How Does India Answer the 3 Basic Economic Questions? 2) How to produce? • India has an increasingly well-educated workforce, especially in engineering and computer science. • India is trying to do better at protecting intellectual and private property rights. • It is difficult to operate a business in India because of the corruption and heavy taxes.

  11. How Does India Answer the 3 Basic Economic Questions? 3) For whom to produce? • Food production is mostly for its own citizens. • Indian software companies are increasingly marketing their services to other countries.

  12. Place on the continuum: India is even more on the market side of center than China Command__________________X_____Market

  13. How does japan answer the 3 basic economic questions? 1) What to produce? • Japan’s economy is mixed (more to market) economy in which supply and demand determine what will be produced. • The few industries that are government-controlled (such as agriculture), have lower productivity than private-run businesses.

  14. How does japan answer the 3 basic economic questions? 2) How to produce? • Private businesses determine their own production processes.

  15. How does japan answer the 3 basic economic questions? 3) For whom to produce? • The Japanese enjoy a high standard of living and create a strong domestic market for goods and services. • Because Japan’s industries are known for their efficiency and quality, it has become a major exporter in the world.

  16. Place on the continuum: Japan is the closest to market of all four countries studied. Command_____________________X__Market

  17. How does north korea answer the 3 basic economic questions? • What to produce? • The majority of economic activities are centrally controlled by the government. • Due to natural disaster and inefficient government-run industries, North Korea receives a large amount of food from charities and foreign countries, such as the United States. • There is an underground economy that runs like a market-based system.

  18. How does north korea answer the 3 basic economic questions? 2) How to produce? • All production decisions and methods are determined by the government.

  19. How does north korea answer the 3 basic economic questions? 3) For whom to produce? • About 25% of the economy is for maintaining the military. This limits the amount of goods and services available to the rest of the people. • North Korea does produce natural resources and manufactured goods for export.

  20. Place on the continuum: North Korea is the closest to command of all four countries studied. It is also one of the most command economies in the world. Command_X______________________Market

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