Economic Systems

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Economic Systems
Andrew Zamora
Mind Map by Andrew Zamora, updated more than 1 year ago
Andrew Zamora
Created by Andrew Zamora over 5 years ago
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Economic Systems
  1. Command Economic System
    1. Government operated and businesses are closely monitored by the government
      1. Economies with large amounts of natural resources will usually have this type of Economy
        1. Allows the government to step in and regulate the resources that are being produced
          1. Could be a very well run economy if the government uses the resources correctly and efficiently
            1. Also known as a Communist Economy
              1. Government decides what will be produced and how much of certain goods will be produced at any given time
              2. Traditional Economic System
                1. Focuses on Goods and Services that directly impact their beliefs
                  1. Relies heavily on the individuals that contribute to the economy because the jobs done are required to maintain society
                    1. Still used today by many undeveloped 2nd and 3rd world countries
                      1. Economy is usually operated by farmers and other traditional activities
                        1. This type of Economic system usually does not produce a surplus of goods which limits the amount of trading capabilities
                        2. Market Economic System
                          1. Relies heavily on free markets and has very little to no government interference
                            1. This type of economy is regulated by the laws of supply and demand
                              1. Businesses are individually owned and operated which promotes competition and small business ventures
                                1. Economy could experience large amounts of growth because of the ability to have free markets
                                  1. Keeps the government and economy separate which leads to some private parties becoming very wealthy
                                    1. Also known as Capitalism
                                    2. Mixed Economic System
                                      1. The United States has a mixed economy
                                        1. Mixture of a market and command economic system
                                          1. There are both private sectors in business and some small government operated businesses
                                            1. Still allows for the market system to regulate itself and promote the laws of supply and demand
                                              1. One small disadvantage is that half the economy is run by the private sector and the other half is by the government
                                                1. Has been adopted by most Western civilizations
                                                2. It is extremely important for every society to utilize one of these economic systems to ensure the proper distribution of goods and services
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