Economic Systems of Europe
Georgia Performance Standards
SS6E5 The student will analyze different economic systems.
a. Compare how traditional, command, and market, economies answer the
economic questions of 1 -what to produce, 2-how to produce, and 3-for whom to
produce.
b. Explain how most countries have a mixed economy located on a continuum
between pure and market and pure command.
c. Compare the basic types of economic systems found in the United Kingdom,
Germany, and Russia.
Essential Questions
 What are the different economic systems across Europe?
 What are the economic systems of the United Kingdom, Russia, and Germany?
Cornell Notes: Economic Systems of Europe
Are
government
and economics
related?
What is an
economic
system?
What are the 4
types of
economic
systems?
How can you
tell the type of
economic
system a
country has?
 Yes, but government and economics are not the same.
 A country’s government can determine or influence the type of
economic system.
 An economic system describes how a country’s economy is
organized.





Traditional Economy
Command Economy
Market Economy
Mixed Economy (Market + Command Economy)
You can determine the type of economic system by answering
the 3 economic questions:
1) What to produce (make)? – What kinds of goods and
services should be produced?
2) How to produce (make)? – What resources (capital,
natural) are available to be used to make the goods and
services?
3) For whom to produce? – Who gets to have the goods and
services?
The way a society answers these questions
determines its economic system.
Who answers the 3 economic questions for the 3 main types of economic systems?
Market Economy
Who decides
What to produce?
Who decides
How to produce?
Who decides
For whom to
produce?
Business – they
make products
based on the needs
of the people in the
society (country). If
there is no demand
for the product, the
business will not
make it.
Business – they
decide the best and
cheapest way to
make the product.
The business wants
to make a profit
(earn money on the
products they
make).
Consumers – the
citizens that buy the
products. They buy
the products based
upon their needs,
wants, and financial
situation.
Traditional
Economy
Government – the
People – The
government makes customs, traditions,
all of the economic and beliefs of the
decisions for the
people of the
citizens. The
society. Products
citizens have NO
are based upon how
INPUT on the
their ancestors
products they would made it.
like to buy.
Government – The
People – The
government decides customs, traditions,
how the products
and beliefs of the
are to be made and people of the
what they are to be society. Products
made with, the
are made based
cheapest way
upon how their
possible as to not
ancestors made it.
cost the government
to much money.
Government – The
People – people in
government
the village or
determines who the society. Bartering
products will be
(trading or
made and given to. exchanging) of
goods and services
is usually used
instead of money.
Command Economy
Economic Systems Continuum
Pure
Command
Mixed
Economy
Pure
Market
 No country has a pure command (total government control of everything) and
pure market (the freedom to buy and sell anything).
 All economies are a combination of pure command and pure market economies.
Economic Systems of the UK, Germany, and Russia
 All 3 countries are mixed economies that have
some combination of market and command
economies.
What to
produce?
United
Kingdom
Germany
Russia
 Service-based
economy (jobs
such customer
service – cashiers,
salespeople,
waitress, hair
dresser).
 Agricultural
products such as
corn, wheat, and
soybeans.
 Germany produces
many goods and
services that are
exported to other
countries.
 Many factories
(manufacturing).
 The Russian
government is still
very involved with
the decisions
businesses make.
How to
produce?
Form whom
to produce?
 Businesses have
the freedom to
make and sell
products and
services that
consumers want
to buy.
 Businesses are
independentlyowned (not
under
government
control).
 Products and
services must not
be illegal.
 Businesses have
the freedom to
make and sell
products and
services that
consumers want
to buy.
 Businesses are
independentlyowned (not
under
government
control).
 Consumers –
individuals and
business that
want to buy the
products and
services.
 Consumers can
also be
international
customers
(people from
other countries).
 Manufacturing
and factories.
 Consumers –
individuals and
business that
want to buy the
products and
services.
 Consumers can
also be
international
 Consumers –
individuals and
business that
want to buy the
products and
services.
 Consumers can
also be
international
customers
(people from
other countries).
customers
(people from
other countries).
UK
Germany
Russia
0
Pure
Command
51%
Mixed
Economy
71%
79%
100
Pure
Market