Economic Systems 1 3 Three Economic Questions 1

Economic Systems 1 -3

Three Economic Questions 1. What goods and services will be produced? 2. How will the goods and services be produced? 3. What needs and wants will be satisfied with the goods and services produced?

What goods and services will be produced • A nation will use its natural resources • Countries should differentiate the goods produced

How to Produce • Each nation will decide how to use its resources to produce goods and services

What Needs and Wants to Satisfy • A country must decide which needs and wants are critical when deciding what to produce.

Economic System • A nation’s plan for answering the three economic questions.

Economic Systems Command Economy Market Economy • Resources are owned and controlled by the government. • Government answers all three economic questions • Resources are owned and controlled by the people of the country.

Economic Systems (Cont. ) Traditional Economy Mixed Economies • Usually centered on meeting the basic needs of people • Goods are produced the way they always have been • Most countries • Combines elements of command market economies

U. S. Economic System • The U. S. falls under the Market Economy • Capitalism-private ownership of resources by individuals. ▫ Free to Produce ▫ Free to Buy �Free Enterprise �Private Enterprise

4 Principles U. S. Economy is Based On • • Private Property Freedom of Choice Profit-Heart of Private Enterprise System Competition

Group Activity