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4 Economics Systems Project

Period 6 Economics
by

susan lee

on 13 March 2013

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Transcript of 4 Economics Systems Project

Four Economic Systems
Susan Lee
Armando Gonzalez
Period 6 Problem... The Soviet Union adopting the economy, were mainly concerned with building national power and prestige in the International community. Centrally Planned As said before, consumers had difficulty getting goods, which were scarce and usually of poor quality. This economic system probably is the best in promoting growth and innovation because U.S. is a good example which uses this system. It continues to thrive using this economic system and with some gov't intervention, people are safe from marketing dangers and are allowed to profit from their own sales. Mixed What is it an economic system in which
the central gov't makes ALL decisions
on the production and consumption
of goods and services. video Mixed
Economy Traditional
Economy Free Market
Economy John Maynard Keynes A British Economist whose
famous Keynesian economics
influenced many Capitalist
Gov'ts as well as people.
His work, "General Theory
of employment, interest, and
money", is the foundation of
modern macroeconomics. Adam Smith His concept of the "Iaissez-faire"-the principle of the invisible hand- was that any free interference w/ free competition by the gov't can ONLY cause harm. U.S. is not a "pure" market economy based on Adam's beliefs, but our economy has adopted some of his ideas. Advantages Gov't
Intervention guaranteed certain standard of life as long as you are willing to work for gov't
free education/healthcare and other benefits
no competition
no industrial unrest due to controlled wages
chances of economic recession lower than other systems
since centrally controlled, tend to be more stable and develop at a steady rate. Disadvantages NO freedom of choice for the people (producers or consumers)
no innovation
Lack of profit motive
inefficient coordination
poor quality/ serious shortages of "nonpriority" goods (ex/ clothes in trend, games)
Unsatisfactory distribution CAN lead to black market economies. Advantages people able to make own decisions
the people given more power
no monopoly
fair competition
market prices well regulated
all national resources utilized by both gov't and private enterprises Disadvantages Gov't regulation laws require
massive amounts of cash
such laws can put some companies
out of business
citizens not in control of the taxes
they pay
different types: if towards a free market, there is little regulation;if towards a command economy, control may stifle growth
encourages more state monopolies
often turn into closed economies, hindering international trade and globalization Comparing to... Traditional Economy little gov't intervention(if not any) economy mainly focused agriculture and hunting mixed doesn't have a lot of shortages both produce goods to sell to costumers mixed: able to pursue any career
trad: following your families' generation of creating items cont... mixed have competition traditional doesn't evolve and
tends to stay the same
(ex: candles instead of electricity) in mixed econ., gov't has somewhat control on what is brought into the U.S. Individuals Compared to... mixed economy Both gov'ts produce for the good of their country have some if not all control over the marketing industry purchase land, labor, and capital centrally planned gov't decides what to produce and the purchase price for it centrally planned economy sacrifice individual freedoms in order to pursue societal goals limits freedom does not "adequately" meet consumer's needs no competition connection Sweden's government is in
complete control of everything, and they
pay a lot of taxes, which results in them
having universal health care. Unlike Canada,
Sweden pays for university, day care, ect. Communism in Soviet Union collapsed
due to poor balance in economy Soviet Union announced '5 year plans' where targets for steel production would be created. connection although the factors of production are owned by the private sector, the U.S. government does get involved in decisions although China went many years without government acknowledging the role that markets play, it has recently been relaxing many restrictions on market-based activity able to compromise with my parents about
chores or other rules in exchange for some of
my freedom able to buy the products I want/need because of U.S.'s mixed economy the boss dictates what to
expect from his employees Parents of a child is able to make decisions for them able to pursue a career path
that interests me Centrally
Planned
Economy ~PROBLEM~ ~PROBLEM~ What can the gov't do to combat poverty? Redistribution programs were created after the Welfare system was criticized by many people and failed to meet the need of the economy
1) cash transfers [social security, worker's compensation]
2) In-kind Benefits [food stamps, subsidized housing, legal aid]
3) Medical Benefits
4) Education
5) Faith-Based Initiatives this market-based economic
system operates with limited
government intervention and is what
most modern economies nowadays uses. So allocated the best land, labor, and capital to armed forces, space program and production of capital goods(farm equipment and factories). --Stalin had some success in increasing output in heavy industries, however the economy is poor quality with serious shortages of non priority goods and services and diminishing production.-- SOLUTION CRITIQUE The countries using it probably were advanced in production of weapon and manufacturing of farm tools but not with non priority goods. short video summarizing the four economic systems http://www.voki.com/pickup.php?scid=7692933&height=267&width=200 voki for critique of Mixed Economy... Free Market Economy A free market economy is an economic system
that is based on a supply and demand created by the consumer and the producer.
This economic system has little to no government supervision, producers and consumers have the freedom to create any transactions based on any sort of agreement without any supervision Advantages Helps create economic efficiency
Contains economic system The market provides a quick response to society's wants/needs
Encourages faster production of goods
Provides a wide variety of goods/services to the consumer Stimulates economic growth Disadvantages Market can fail to provide certain goods/service at reasonable price
The market gives more option to the wealthy part of society
Factors of production will be employed if and only if profits are being made
Create social in justice
Wont provide market failures like free education, health care, libraries, and highways
Social cost will get ignored; more pollution, messy enviorment Problem Solution The strong competion will buy out every single type of competion or sell them out. And producers will create harmfull products for the consumer Government should get involved in order to prevent monopoly, and to regulate the prices and quality of products. Similarities Free Market Traditional Market open to new ideas
fast paced
new technology
variety of good/services
promotes economic growth
luxury goods/want are available
competition
unstable jobs No economic growth
no technology
no support for new ideas
trade only for necessities
very little hostility against competition
a little to no competition
steady jobs
unity What is it? A traditional market is based on based on habits, customs or rituals to decide what to produce, how to produce it, and whom to sell it to. There are very few types of these markets left throughout the world. The reason being is because these are very small economies, and they are easily being over run by the stronger economic systems. These economic system are often very small community's that stay real close and stay very small Advantages Disadvantages All members in the economy remain close
Each member supports each other in any possible way
Hostility is reduced because of the lack of compition
Society feels secure because there job rolls seem to be defined
Food production is always measured to meet exact demand
Extra food is never wasted instead it is traded for other goods
Everyone in the economy is employed in some sort of activity This economy is resistance to change
Production seems to get held back
Society has low standards in living
Some members are chosen for there job against there will
Little to no technology
Theres very little social mobility Problem? The main problem with a traditional economy is that they resist any change that has to do with there economy. Solution In my opinion the solution to this problem is very simple. I think these small economic systems should allow new technology into there system. For a compromise though, i believe they should not allow any outside corporations to come into there system even though they have new technology jobs are open
both have producers
both have consumers
both provide good/services to society Comparing Freedom to buy and sell goods increased production John Adams idea of Laissez Faire influence the free market. His idea stated that government should leave individual as free as possible which is basically the the literal meaning of his idea Laissex Faire which means "let them do as the please". He believed that if an individual was left alone they would try to better themselves and produce more good/services and jobs. Similarities Centrally Planned Traditional Comparison Government has complete control
no competition
one price
more stable economy
fair living conditions
large economy
no entrepreneurs no government control
small economy
Unity within economy
trades good for other goods
no competition
some entrepreneurs stable economy
no competition
equality throughout social
fewer industrial waste
stable jobs
food production is often precise Real World Connections World: The Amish people still believe in traditional markets, they dont rely on technology In some parts of Mexico they still use traditional markets to provide necessities Connections World: The US economy is considered a free market even though some critics consider it being more of a mixed economy because of the way the government controls the system Singapore is also considered a free market, unlike the US, Singapore has no government control over the market Personal: A personal experience i have with a free market is when i go to work with my dad, i have helped him start his small landscaping business, this is an example of a free market because it gives everyone an opportunity to start their own business
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