Economics

A global system

An organized way of producing for the wants and needs of a society.

ECONOMIC SYSTEM

Three Types of Economic systems or economy

• Traditional Economy

• Command Economy

• Market Economy

•

• Most countries can be

identified with one of

these systems.

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Traditional

• Economic decisions in this type of economic system are defined be custom.

• Advantages to a Traditional system:

• the people have little uncertainty about what, how and for whom to produce.

• Their life style and economy are secure.

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Disadvantages to Traditional

• Disadvantages to a traditional economic system:

• There is discouragement of new ideas and new ways of thinking.

• Leads to much staying the same, nothing ever changing for the better, but not for the worse either.

• But this gives you security

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Command

• In a Command economy there is a central authority (i.e. government) who determines what, how and who to produce for.

• Advantages:

• Ability to change direction in a short period of time,

• Have public services at little or no cost to the people.

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Disadvantages to Command

• Disadvantages to this type of economic system:

• Consumers don’t get their needs met.

• There can be delay in decisions.

• Essentially one group is making all the decisions, which you may or may not agree with.

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Market☼Perhaps the best form of economy☼

• Consumers determine what, how and for whom to produce.

• For the People by the people kind of idea

• Advantages to a Market economy:

• The high degree of individual freedom; the ability to have a voice in the economy.

• Variety of goods and services

created

Disadvantages to a Market Economy

• Disadvantages to this economic system:

• High level of personal uncertainty

• And prospect of economic failure.

• All images were found using Google Images.