Economic System

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Economic System by Mind Map: Economic System

1. Capitaism

1.1. Is an economic system in which all of most of the factors of production and distribution are privately owned and operated for the profit.

1.2. An example of capitalism is the prison system in the United States being operated by private companies.

1.3. Pros Of Capitaism

1.3.1. Incentives to be rich encourage innovation.

1.3.2. Firms have incentives to be efficient.

1.3.3. Consumers free to choose products they desire.

1.3.4. Prevents large bureaucratic government.

1.4. Cons Of Capitaism

1.4.1. Firms can gain monopoly power and exploit consumers.

1.4.2. Firms with monopsony power can pay lower wages.

1.4.3. Externalities can damage the environment.

2. Communism

2.1. A economic and political system in which the government makes all of the economic decision and owns almost all of the major factors of production.

2.2. An example of communism is the governing system in Cuba where the government controls everything and doles out benefits such as money, health care, and food.

2.3. Pros of Communism

2.3.1. Everyone can receive health care Unlike capitalist countries like America that restrict health care access to those with the most wealth and influence, communist nations allow of their citizens to receive the medical attention that they need, typically free of cost.

2.3.2. Unemployment rates dramatically decrease When every member of the society is able to work and contribute, naturally, you will see a great dip in the overall unemployment rate of a nation

2.3.3. Education is easily accessible One of the easiest ways to ensure a class-less society is to break down the barriers of education. Since every child is given the same level of educational opportunity, the divide between classes shrinks until it is essentially nonexistent.

2.4. Cons of Communism

2.4.1. Business are limited in what they can ear

2.4.2. Poverty is prevalent

2.4.3. There is no personal freedom

3. Socialism

3.1. Is an economic system that is based on the premise that some, if not most are basic businesses which should be owned by the government. This is so that profits can be more evenly distributed among the people.

3.2. An example of Socialism would be a nuclear family.

3.3. Pros of Socialism

3.3.1. Workers are no longer exploited, since they own there own means of the products.

3.3.2. This system eliminates poverty.

3.3.3. Everyone has equal access to health care and education. No one is discriminated against.

3.3.4. Natural resources are persevered for the good of the whole

3.4. Cons of Socialism

3.4.1. The biggest disadvantage of socialism is that it relies on the cooperative nature of humans to work. It negated those within society who are competitive, not cooperative.

3.4.2. Criticism is that it doesn't reward people for being entrepreneurial and completive.

3.4.3. The government is set up to represent the masses may abuse its position and claim itself for power.

4. Mixed Economy

4.1. Is an economic system which exist where some allocation of resources is made by the market and some by the government. Many countries don't have a name for such a system.

4.2. A mixed economy is where there is a mix capitalism and socialism and/or public and government control. A basic example for a mixed economy is the United States.

4.3. Pros of mixed economy

4.3.1. Equal distribution of control

4.3.2. More efficiency for private firms

4.3.3. Freedom for private enterprise to thrive on their own

4.3.4. A defined role for the government as a referee

4.3.5. Safe haven from poverty

4.3.6. Greater chance for the government to implement good policies

4.4. Cons of mixed economy

4.4.1. Challenge of find a balance

4.4.2. Government going to far

4.4.3. Excessive intervention by the government

4.4.4. Higher taxes

4.4.5. Limited corporate size