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.