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Copy of Compare and Contrast 4 Economic Systems

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leonard morgan

on 18 March 2013

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Transcript of Copy of Compare and Contrast 4 Economic Systems

By Erika and Antonio Compare and Contrast 4 Economic Systems Centrally Planned Economy Mixed Economy Definition: A economy in which the government decides what the people want, what the people need, and what the people do. Free Market A market-based economic system combined with traditional market, containing limited government intervention. Traditional Economies definition: A traditional economy is an economy based on custom and tradition/command An economic system that has decisions that are made by individuals on production and consumption of goods and services and are based on voluntary exchange and trade. Similarities and Differences Real World Connection Personal Connection Advantages Disadvantages Problem Solution What is a Market Economy? Economic Efficiency Intense competition: can make it hard for some companies to succeed, possibly forcing some businesses to go bankrupt Market failures No guarantee of full employment No equal distribution of wealth/class separation Economic Security and Predictability Economic Growth Economic Freedom What is a Mixed Economy? Problem Solution Corruption Real World Connection Advantages Disadvantages Freedom to own private property People make their own decisions Government has limited control Rapid economic development Inequality of income Planned development Lopsided development Corruption May often turn into closed economies The Basics on the 4 Economic Systems Similarities Between... Similarities Between... Differences Between... Differences Between... Differences Between... Similarities Between... Free Market Mixed Economy High competition Similarities Between... Mixed Economy Centrally Planned Economy and Have a central government that helps meet people's needs Free Market Traditional Economy Is found in indigenous populations Is found in developed societies Centrally Planned Economy Free Market and Have people motivated to work going online and watching the stock market Toyota comes out with a new car, which competes with other companies' cars. When consumers demanded better fuel efficiency, the automakers listened, making them more efficient without any government intervention Going to the store and had the freedom to choose the things I want In the UK, majority of the markets are controlled by demand and supply with large amounts of government intervention like the National Health Service, the education system and the Royal Mail. The government gives a certain range to keep the gas prices for the companies to offer their consumers. So they get to choose the price they want to sell for. Though, if it gets too expensive, or inexpensive, than what was offered to them, the government will step in. Surfing the internet at home without any parental guidance Adam Smith John Maynard Keynes There is no equal distribution of wealth between the people in the market. Have the government give even with the slightest assistance with regulating the market, especially when the producers are abusing the prices they offer their goods in specific locations, so they could fulfill the needs of the poor and decrease the greedy amount of wealth of the rich. There is a lopsided development in fixed locations. In certain areas, growth is efficient, but in other areas, there could be a market failure. Have the government check how much they regulate the areas they are watching over. And if they are regulating too much or too less in specific places that they are resulting in market failures, change regulations as needed for those areas. Critique Voki link: http://www.voki.com/pickup.php?scid=7683890&height=400&width=300 Critique The benefits of a market economy is that it allows the most desired goods and services to be produced for the consumers. Although, the problem with this economic system is that there are many people in the society who can't be competitive, like the elderly, the children, and those mentally/physically challenged, even their caretakers. As an economist, he had a theory on a way the economy could be successful and efficient. The Invisible Hand, says that by giving people free trade and opening all markets to competition, people's natural self-interest would bring about universal wealth with little effort from a nation's government. He wrote a book, called "Wealth of Nations," which showed that the best way to expand the economy without the government interfering with the entrepreneurs. Personal Connenction Being an economist, a theory he created was Keynesian economics, which promotes a mixed economy. Keynes believed that it'd be beneficial for the government to intervene using fiscal and monetary measures to reduce the effects of recessions and booms. It supports a mixed economy by being guided by the private sector, but partly controlled by government. traditional centrally planned In a traditional economy, decisions are made based on customs, culture, faith and 'tradition of community. centrally planned economy traditional In a command economy the government decides how many of which goods are produced. But in a traditional economy the social roles and culture determine how goods and services are produced. In a command economy the government decides how many of which goods are produced. But in a traditional economy the social roles and culture determine how goods and services are produced. similarities between Centrally planned and traditional market economies use price mechanism to solve the problems of economic .
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