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China
United States
Germany
South Africa
Canada

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China-Mixed Economy (Leans toward
Command)
United States-Mixed Economy (Leans toward Market)
Germany-Mixed Economy
South Africa-Mixed Economy
Canada-Mixed Economy
Did these answers surprise you? Why or
Why not?

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The economy is run by an authority and not the market.
The authority tells people what to make, how to make it and how much to make.
The authority controls the economy through quotas, rationing and price and wage controls.

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Maximize resource mobilization for the benefit of the country
Radically transform the socio-economic system for better economic equality
Organize the economy

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Effective and rapid economic modernization.
Attempted economic equality

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Inefficiency of economy
No “material incentive” or “profit motive”

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Why might people want a
Command Economy?
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Why aren’t there more
Command Economies in the
World?

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Market economies emphasize private property, self interest and freedom of enterprise and choice
This is accomplished through limited governmental role in the economy, no price controls and promotion of competition.

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Full Employment
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Low Inflation
Economic Growth
Efficiency
Economy of the

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Efficiency in producing what people want to buy at the lowest cost
Promote economic growth
Free entry and exit of businesses

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Low Economic Equality
Full Employment?

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How does a Market Economy fulfill its purposes?
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Why would the purposes of a
Market Economy be necessary in a modern economy?

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Hard to define
But, it combines economic freedom with government regulation
People have the freedom to produce what they want in the manner they want
The government can regulate businesses, like passing minimum wage laws

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Have the public and private sector work harmoniously together
Businesses can perform efficiently while the government can make sure those businesses are being fair and to limit negative externalities

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Allows for competition among businesses
But, government regulation protects the public from the worst aspects of economic freedom.
Taxes help pay for government programs

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The wrong regulation can be catastrophic to the economy
Businesses have no say in how much they get taxed

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Why would businesses need regulation?
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How does a Mixed Economy limit the worst aspects of a
Command Economy and a
Market Economy?