CE 11b Economic Systems

This economic system is driven by the desire to make money (profit).

This economic system has limited government intervention (mostly in the PUBLIC sector)

Consumer sovereignty & Individual Choice

Individuals/businesses own and make private sector decisions. Gov owns & makes public sector 1s

Government’s role is greater than in a free market economy and less than in a command economy.

In this economy, people can ONLY buy what the GOVERNMENT picks. 

Central ownership (usually by government) of property/resources, & lack of consumer choice

Most economies today, including the United States.

This economic system is controlled entirely by the government.

People often perform the same type of work as their parents and grandparents.

Private ownership of property, $$ motive, competition,  & minimal government involvement

What are the basic economic questions all societies must answer?

Countries rely exclusively on the markets to deal with the economic problem of SCARCITY.

The power of the people who buy determines what goods and services are produced.  

Each type of economy answers these three basic questions...

What determines the type of economy of a country is the extent of government involvement. 

Economic decisions are based on custom and historical precedent.