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Economic Systems Notes

econ

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hirvelanatasha
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2 views

Economic Systems Notes

econ

Uploaded by

hirvelanatasha
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Part 1: Overview of Economics Systems

Directions: Use Chapter 2 in the EMC textbook (found on Clever) to complete the following
note outline.
Economic systems
Centrally planned (command economy)- communism
In central planned economy the government:
1) Owns all the resources
2) Answers the 3 economic questions
Why have centrally planned economics faced problems or poor quality goods, shortages and
unhappy citizens?
little incentive to work harder(lack of individual reward) and central planners have a hard time
predicting preference
Communism
 tends to combine both economics and politics
 The government has ownership over who what and how
 Little to none private owner ship
Communism Manifesto
Karl Marx and Friedrick Engels
 Written in 1848
 Workers would unite and control their work
 Would eventually be mo need for government a classles society all share profits free
education and health care
 Anti specialization and mass production he felt it turns people in mindless machines
 “RELIGION IS THE OPIATE OF THE MASSES”
Socialism
 Principle belief is that wealth should be shared
 Has multiple forms of government
 Allows for some free market policies
 Officials in central authority tend to be elected
Free market economy
Mixed economies
 The Three Economic Questions:
o 1)what goods and services should be produced to meet consumer
needs?
 This is due to scarcity
o 2) how should they be produced and who should produce them
o 3)who should receive goods and services
o Two major economic systems:
 1) Free enterprise: (definition) is economic system where a
government places very few restrictions on the type of
business activities or ownership in which citizens participate
 Also called: free market economy and command
economy
 Examples include: your decision to open a store

 2) Socialism: (definition) a theory of social organization which advocates


that the means of production, distribution and exchange should be
owned
o
 Also called: Marxism-Leninism
 Examples include: communism and
china

Part 2: Understanding the Major Differences Between Free Enterprise and


Socialism
Directions: Use Chapter 2 in the EMC textbook (found on Clever) to complete
the following table.

Concept Free Enterprise

Individuals own most of the countries


resources Everyone has
Resources
these

Rewards that influence peoples behavior


Incentives There are no

Government's Role in the Economy What is to be


To allow individuals to make the most of their And distribut
economic freedom
Organuzatuin
Freedom for individuals to choose businesses To directly sa
Economic Plans
Economic de
And human n

A conflict between business over coustmers


Competition and sales Very restricte

A statistical measure of how a countrys total Relys on eith


Income Distribution GPD is divided among the population Government
cooperatives

Price of something based on scaricity Government


Controlling Prices the input an
prices

Consumers have the right to acquire


Private Property Against priva

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