QRG:
Types of Economic Systems
Subtitle
Title and Content Layout with List
I. Traditional Economic System
II. Command Economic System
III. Market (Capitalist) Economic System
I. Characteristics of a Traditional
Economy
1. Simple Economic Activity
-Traditional economies are base don simple activities such as hunting,
gathering, and farming.
2. Reliance on custom and tradition
-Based on customs that are passed from generation to generation; they
experience very little change over time.
3. Technology
-Reliance on simple technology, ex: Horse and Plow. Few technological
changes take place over time.
4. Family labor and gender roles
-Reliance on the labor of the entire family. Men and women have defined,
distinct economic roles
II. Characteristics of a Command
Economy
1. Government ownership of economic resources
- The government or some other central authority owns most economic
resources.
2. Government control of economic resources
-The government decides how goods and services are produced and
distributed.
3. No profit motive and no business competition
-The purpose of business is not to make $$$ (profit). As a result ther eis no
competition between businesses
4. Reduced individual economic freedom
The government controls the economy; therefore, people who sell goods can’t
set their own prices.
III. Characteristics of a Market
Economy (aka Capitalist)
1. Individual ownership of economic resources
-Individuals or corporations own businesses, not the
government
2. Individual control of economic resources
-Individuals decide how goods and services are produced
and distributed, usually for the maximization of $$$
(profits).
III. Characteristics of a Market
Economy (aka Capitalist) continued…
3. Profit motive and business competition
-In a market economy, businesses are run for the purpose
of making a profit. As a result, they compete with one
another to supply the goods and services that consumers
demand.
4. Significant individual economic freedom