Economic Systems Types Functions and Problems Ms Miller

Economic Systems: Types, Functions, and Problems Ms. Miller Economics November 2015

What is an “Economic System”? O An _______ refers to the way in which the _____ of a country are used to produce ________. It also has to do with the manner in which __________ are ______ for consumption.

Things to look at: v _________ • How strong or weak is the governments involvement in the economy and economic decision making? v _________ • How much freedom do producers and consumers have in what they make and buy? v _________ • Who owns the resources and how are they controlled? v __________ • Who determines the prices and how are they controlled? v ___________ • Who gets the money from the sale of the products?

Functions of an Economy v ____________ • How much to produce? v ____________ • What to produce? • How to produce? v ____________________ • Who should the finished goods go to? v ________________ • Who encourages the development of the economy? v ___________________ • Who ensures that the economy remains stable?

3 Major problems any economy can face: 1. Allocation of Resources § _______________ 2. Utilization of Resources § ________________ 3. Growth of Resources § ________________

Types of Economies _________ _

__________ Ø existence was primarily based on ____________ Ø ____ was the main form of trading Ø individuals existed on a _______ Ø the decision of what, how, and for whom was determined ___________ Ø resources were owned or controlled by a _________.

__________ In this type of economy ___________: Ø ______ economic activity Ø makes all decisions regarding _________ Ø decides what _______, ______ of each good to produce, _____ the people should get, and ____ gets it.

_________ Ø The _______ plays _______ role in economic activity Ø Emphasis is on freedom of the _______________ Ø The private sector (__________) answer the basic economic questions. Ø There is ___________. Ø _________ is the main goal in this economy. Ø The __________ determines price in this economy.

__________ Ø Economic decisions are taken by the ________ system and also by ________ Ø The ______________ operates along the lines of the __________, where the price mechanism determines allocation of resources. Ø The aim of the private sector is to ________while the aim of the public sector is to ____________ Ø The public sector _____________ that the private sector is _______________, with a bureaucratic set up like the planned economy