Economic Systems Mind Map

Economic Systems Mind Map

1. Free Market Economic System

   • Participants determines what products are produced, how, when and where they are made.
     • Government doses not control vital resources, valuable goods or any other major segments of the economy.
       • Pros: With the seperation of the market and government, help prevention of the government becoming too powerful and controlling.
       • Cons: Even with progress and innovation occurance at incredible rates, worldly functions has a way of being negatively affected.
     • Theres no government regulations on buyers and sellers and they imposes very few to no restrictions.

2. Command Enocomic System

   • An economy that the production investments, prices, and incomes are determine centrally by the government, who is often involved in the planning of everything.
     • Command economy developed when a country findes itself in possesion of a very large amount of valuable resources.
     • The influence of the government is capable of producing healthy supplies of it's resources, which make the prices affordable.
       • Pros: The supporters enables the government to ovrcome market failure, inequality and create a society that maximises social welfare rather than profit.
       • Cons: Without a viable economy, a state will collaspe, acting as a central planner dictating production quotas and distribution levels and setting prices.

3. Mixed Economic System

   • An economic system with the combination of private and public enterprise. Even though there's a less involvement with the government, they are helpful during market failures in aiding with healthcare and social security.
     • Mixed economic system protects private property and allows a level of economic freedom in the use of capital and combines with the aspect of both capitalism and socialism.
     • All modern economies are mixed where the means of production are shared between the private and public sectors.
       • Pros: Market that is more or less to have government ownership, but witth benefit programs like education, transportation and dual economy.
       • Cons: Government decides the amount of tax on products, which leads to people complaining about high taxes and their unwillingness to pay them.

4. Traditional Economic System

   • A system in which traditions, customs, and beliefs help shapes the goods and services the economy produces. Countries that uses this type of system are often rural and farm based, there's no changes in how it operate and is conceived as primitive or undeveloped.
     • Traditional economies produce minimal waste of products and have a preserve, specific and pronounced role in society. There's no economic stability and with the traditionsl economy they don't take full advantage to enjoy the total freedom, centralized utilities or technology.
     • Still produce products and services that are a direct result of their beliefs, customs, traditions, and religions. These areas tend to be rural, second or third world countries and closely tied land like farming.
       • Pros: Beliefs depends on agriculture, fishing, hunting, gathering or a combination of operations. A traditionsl economy doesn't require the use of moderen conveniences in order to produce food and products.
       • Cons: When changes in wheather, the economy is jeopardized, those who live with this kind of economy look to be living in poverty despite their daily needs.

5. The economic system that's used in the U.S. is the free market economy. Free market economic organizations are run by the people that determine how it runs, how supplies are generated and what demands are necessary. American is a capitalist nation in which can be well controlled and relatively safe for fair trade, government programs, moral business or monopolies.

   • The economic system is important to have in society, government business, small businesses, household and individual allocated resources scarcely through economics. It's important to the planning coordicantion and reform, facter and product markets, prices, population, finanacial, products, money, inflation, investment and aid, welfare and poverty, environment, energy, legal and property rights. The economic system is where a distribution of goods and services within the society. The economic system is made up of various agencies, and decision making process.