NAME:_______________________________________________
Class:________
ECONOMIC $Y$TEM$
An economic system describes___________________________________________________
WHY does every country need an economic system?__________________________________
____________________________________________________________________________
The 3 Basic Questions every economic system must answer:
1.___________________________________________________________________________
2.___________________________________________________________________________
3.___________________________________________________________________________
Economic System
Who answers the
3 Basic Questions?
Examples/Notes
Traditional Economy
Command Economy
Market Economy
aka
 Capitalism
Hallmarks:
1.
2.

3.


Mixed Economy
aka
 Mixed Market
4.
5.
NAME:_______________________________________________
Class:________
ECONOMIC $Y$TEM$
An economic system describes how a country’s economy is organized.
WHY does every country need an economic system? In every country there is a scarcity of
resources; countries need economic systems to determine how to use its resources.
The 3 Basic Questions every economic system must answer:
1. WHAT TO PRODUCE? (what kinds of goods/services?)
2. HOW TO PRODUCE? (what will be used to make goods/services?)
3. FOR WHOM TO PRODUCE? (who gets to have the goods/services?)
Use your Class Reading and Textbook to complete the following table!
Who answers the
3 Basic Questions?
Examples/Notes
Traditional Economy
 Based on tradition –
the way things have
always been done
 Barter system
African tribes
Any tribal society in
developing countries
Command Economy
The Government
owns land; determines
wages and prices;
assigns jobs
Former Soviet Union
North Korea
Cuba
Individual buyers
and sellers
1. Private Ownership
Economic System
Market Economy

Capitalism

Free Enterprise

Private Enterprise
2. Entrepreneurs
3. Competition
4. Price System: Profit
5. Freedom of Choice
Mixed Economy

Mixed Market
Government
and
Individuals make
decisions
U.S.
Canada, Japan, most
European nations.
There are NO TRUE
market economies today.
All are MIXED.
NAME:_______________________________________________
Class:________
EXAMPLES OF GOVERNMENT INVOLVEMENT
IN U.S. ECONOMY:










Social Security
Medicare/Medicaid
Food Stamps
Public Housing
Pollution Law (Regulations)
Unemployment Insurance
Stimulus Package
Bank Bailouts
Post Office
Business Licenses
NAME:_______________________________________________
Class:________
ECONOMIC $Y$TEM$
An economic system describes ______________________________________.
WHY does every country need an economic system? _______________________________________
__________________________________________________________________________________
The 3 Basic Questions every economic system must answer:
1. WHAT TO_______________? (what kinds of goods/services?)
2. ________TO PRODUCE? (what will be used to make goods/services?)
3. _______ ________________TO PRODUCE? (who gets to have the goods/services?)
Economic System
Traditional Economy
Who makes the
economic decisions?
Examples/Notes
Based on _____________
the way things have
always been done
_____________ system
Command Economy
The ________________
owns land; determines
wages and prices;
assigns jobs
Market Economy
Individual ___________
1. _____________Ownership
and_________________
2. __________________

Capitalism

Free __________

___________
3. __________________
4. ____________ System:
______________
Enterprise
5. Freedom of ____________
Mixed Economy

Mixed Market
________________
and
__________________