Comparative Economic Systems

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					Comparative Economic Systems




            2.1
kduncan.wikispaces.com
        Command vs Market
Which is the best system?

Why?



  FREEDOM V. EQUALITY
If you were
education
minister
within a
command
economy,
what type of
education
would you
mandate?
    ‘We make good the difference in 10
         years or they crush us’.
                 1927   1933   1937

Electricity ('000 5     13     36
million kw)

Coal (million    35     64     128
tons)

Oil (million     12     21     47
tons)

Steel (million   4      6      18
tons)
Evaluating Economic Performance




              2.2
Economic and Social Goals of the US
•   Economic Freedom
•   Economic Efficiency
•   Economic Equity
•   Economic Security
•   Full Employment
•   Price Stability
•   Economic Growth
                        Equity
• Justice, impartiality, fairness
• For employment, it is illegal to discriminate on the
  basis of age, sex, race, religion, or disability.
                        Security
• Protection from adverse economic events:
  – Unemployment, layoffs, illnesses, disability, old age
• Social Security – federal program of disability and
  retirement benefits that covers most working people
http://www.china-europe-usa.com/level_4_data/hum/ani/ani_usa_2L.gif
TRADE-OFFS AMONG GOALS
• Full-employment vs. individual freedom
   – Policy that keeps foreign-made shoes out
• Economic growth vs. stability y security
   – A new shopping center built near a highway
      • Could help stimulate economic growth in one area of a
        community while threatening merchants who run stores in a
        downtown area
• Equity vs. freedom
   – Minimum wage
                   Price Stability
• Stable prices
• Inflation – a rise in the general level of prices
   – Hurts people with fixed incomes – an income that does not
     increase even though prices go up
• The federal reserve increases interest rates to
  discourage businesses from borrowing and spending
            INFLATION
• What is a dollar worth?
  http://woodrow.mpls.frb.fed.us/research/data/us
  /calc/
• Consumer Price Index, 1913-present
  – http://www.minneapolisfed.org/community_educatio
    n/teacher/calc/hist1913.cfm
• Not Everything is More Expensive
  – http://www.nytimes.com/imagepages/2008/05/07/bu
    siness/20080507_LEONHARDT_GRAPHIC.html
• WHY???

				
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posted:10/17/2012
language:English
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