Whos the Boss LAPEC017 Economic System The organized
Who’s the Boss? LAP-EC-017
Economic System § The organized way in which a country handles its economic decisions and solves it’s economic problems
ALL Economic Systems have: § § Resources Markets Participants Medium of Exchange
Most common Medium of Exchange is Money § Dollars § Euro § Yen § Peso § Can you name other types of currency? ?
Why does a country need an economic system? Limited resources + Unlimited Wants/Needs = Scarcity
3 Basic Questions every economic system answers § § § What will be produced? How will it be produced? Who will get what is produced?
Traditional Economic System § § Very few new ideas or improvements AKA Subsidence system Lacks economic growth Custom dictates who answers the 3 basic economic questions § Name some countries with this type of economic system…
Communist Command Economy § Government controls the economic system § No private ownership of businesses § Poor quality products § Government answers the 3 basic questions § Name some countries with this type of economic system…
Socialist Command Economy § Government control most of the means of production § SOME private ownership and distribution § High Taxes § Government and Business answer how products will be produced, other questions are determined through supply and demand, government planning, and businesses § Name some countries with this type of economic system…
Market Economy § Individuals and Businesses own the means of production and distribution § Has limited government involvement § Individuals and Businesses answer the 3 basic questions
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