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The Three Major Economic Systems - TheFacultyLounge


									 China
 United States
 Germany
 South Africa
 Canada
 China-Mixed Economy (Leans toward
 United States-Mixed Economy (Leans
  toward Market)
 Germany-Mixed Economy
 South Africa-Mixed Economy
 Canada-Mixed Economy
 Did these answers surprise you? Why or
  Why not?
 The economy is run by an authority and
  not the market.
 The authority tells people what to make,
  how to make it and how much to make.
 The authority controls the economy
  through quotas, rationing and price and
  wage controls.
 Maximize resource mobilization for the
  benefit of the country
 Radically transform the socio-economic
  system for better economic equality
 Organize the economy
 Effective and rapid
 Attempted
  economic equality
 Inefficiency of economy
 No “material incentive” or “profit
 Why might people want a
  Command Economy?
 Why aren’t there more
  Command Economies in the
 Market economies emphasize private
  property, self interest and freedom of
  enterprise and choice
 This is accomplished through limited
  governmental role in the economy, no
  price controls and promotion of
 Full Employment
 Low Inflation
 Economic Growth
 Efficiency of the
 Efficiency in producing what people
  want to buy at the lowest cost
 Promote economic growth
 Free entry and exit of businesses
 Low Economic Equality
 Full Employment?
 How     does a Market Economy
 fulfill its purposes?
 Why would the purposes of a
 Market Economy be
 necessary in a modern
 Hard to define
 But, it combines economic freedom with
  government regulation
 People have the freedom to produce
  what they want in the manner they want
 The government can regulate
  businesses, like passing minimum wage
 Have the public and private sector work
  harmoniously together
 Businesses can perform efficiently while
  the government can make sure those
  businesses are being fair and to limit
  negative externalities
 Allows for competition among businesses
 But, government regulation protects the
  public from the worst aspects of
  economic freedom.
 Taxes help pay for government programs
 The wrong regulation can be
  catastrophic to the economy
 Businesses have no say in how much
  they get taxed
 Why   would businesses need
 How does a Mixed Economy
 limit the worst aspects of a
 Command Economy and a
 Market Economy?

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