Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. Command Economic System

1.1. A command economy is one that is controlled by a central power. China and North Korea are currently known as command economies.

1.1.1. Pros - Mobilizing resources on a larger scale.

1.1.2. Cons - Calculating demand is difficult as the price is set on products and services.

2. The United States Economic System

2.1. I believe that the United States is a mixed economy using both capitalism and socialism. This allows the United States to have something close to a free market in which individuals are able to privately own goods and services. However the government is permitted and will step in to intervene when necessary. The government is allowed to control certain things such as education, courts, hospital care and even postal delivery.

3. Mixed Economic System

3.1. This is a combination of different types of economic systems, market and command.

3.1.1. In theory, a mixed economy is trying to get the best of both options while utilizing both socialist and capitalist policies.

3.1.1.1. Pros - The government can step in when a company is abusing monopoly power. It is easier for the government to create and utilize programs for healthcare and social security.

3.1.1.2. Cons - Too much government intervention vs not enough government intervention.

4. Traditional Economic System

4.1. This was the original of the systems created and grown based on customs, beliefs and traditions that helped to grow the economy to determine what goods and services would be offered and how.

4.1.1. An example for a traditional economic system would be one that is typically farm-based or rural. Haiti is currently an economy that functions in a traditional style today.

4.1.1.1. Pros - Bartering is an option

4.1.1.2. Cons - Lack of technology and advanced medicine

5. Market Economic System

5.1. A market economic system is one in which the laws of supply and demand direct the production of goods and services.

5.1.1. Pros - Freedom of choice, motivated entrepreneurship, promoting innovation and higher prices being paid by consumers.

5.1.2. Cons - Society is not equal opportunity for everyone, increased low income families and a disadvantage for those who are not competitive in the economy.

6. Why is it important to have an economic system?

6.1. Having an economic system can help a country grow and improve or it can make things worse depending on how it is run. Being able to determine what goods and services will be offered and produced are a huge part in being a mixed economy.