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Overview of Economic Systems and Their Characteristics

In a traditional economy, customs and habits dictate the production, distribution, and consumption of goods. A command economy involves government control over economic decisions, while a market economy relies on buyer-seller interactions. Most countries today have a mix of market and command economies. Three basic economic systems exist: traditional, command, and market. Examples include the United Kingdom as a pure market economy and Russia as a pure command economy.

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Overview of Economic Systems and Their Characteristics

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  1. • Produced = to make • Distributed = to give out • Consumed = to take in

  2. • In a traditional economy, the customs and habits of the past are used to decide what and how goods will be produced, distributed, and consumed. • People know early in life what type of job they are going to have – Their careers are based on what their parents do.

  3. command economy is when the government planning groups make the basic economic decisions • The Government determines what : 1. Goods will be produced 2. What services will be completed 3. The prices of goods and services 4. How much money each person will make

  4. • In a market economy, decisions are guided by changes in prices that occur between individual buyers and sellers in the marketplace.

  5. • There are no “pure” market or command economies anymore… now countries have… This means that countries have a “mixture” of both market and command economies.

  6. Economic Systems Pure Market Pure Command

  7. United Kingdom 79% Germany 71% Russia 42% Pure Market Pure Command

  8. • How many basic types of economic systems are there? • Name the economic systems.

  9. • How many basic types of economic systems are there? 3 • Name the economic systems. Traditional, Command, Market

  10. Canada 81% Brazil 57% Cuba 28% Pure Market Pure Command

  11. Australia 83% Pure Market Pure Command

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