Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. TRADITIONAL ECONOMIC SYSTEM

1.1. Traditional economic systems are based on traditions, customs, and beliefs. These shape the goods and services as well as the rules and manner of their distribution. These countries are normally rural and farm based.

1.2. Traditional economy is used in Africa, Asia, Latin America, and the Middle east.

1.3. Pros- There is little to no friction between members. Everyone knows their roles. There is more sustainability.

1.3.1. Cons- These economic systems are at risk of changes in nature and weather. They are also vulnerable to market or command economics that use natural resources.

2. COMMAND ECONOMIC SYSTEM

2.1. This economic system is where production, investments, price, and incomes are determined centrally by a government

2.2. Command economy is used in Cuba, North Korea, and the former Soviet Union.

2.3. Pros- They have low levels of unemployment as well as low inequality.

2.3.1. Cons- This economy has a lack of competition and a lack of efficiency.

3. MARKET ECONOMIC SYSTEM

3.1. This is a economic system that is based on production and prices. They are determined by unrestricted competition between privately owned businesses.

3.2. Market economic systems are used in Mexico, The United States, The United Kingdom, Germany, and Canada.

3.3. Pros- There is free interplay of supply and demand. It also ensures goods and services.

3.3.1. Cons- There is a large amount of companion and no system to care for the elderly, children, disabled, and mentally ill.

4. MIXED ECONOMIC SYSTEM

4.1. Mixed economic system is a system combining private and public enterprises.

4.2. Mixed economic system are used in Iceland, Sweden, France, The United States, The United Kingdom, Russia, and China.

4.3. Pros- The mixed economy is has the ability for private property to be owned and a driven self-interest.

4.3.1. Cons- Federal Government can safeguard people and markets. The Government can also own key industries.

5. The Unites States Economic System

5.1. The economic system used in the United States is known as "pure capitalism" or "laissez-faire capitalism". The United States is a mixed economic system with both free market and centrally planned economic system that is controlled by the government.

6. What is an Economic System

6.1. An economic system is how countries and governments distributes resources and trades of goods and services. This is how countries and governments also controls labor, capital, entrepreneurs, physical resources, and information resources. This involves employees and money a company has at its disposal as well as access to entrepreneurs. The purpose of an economic system is to manage a household, to produce, and distribute food, water, good, services, and needs primarily for preserving the human life.

7. Importance of economic system

7.1. Economics provides a scientific approach to analyzing and understanding government decisions for ensuring stable economic growth with low inflation and the highest possible level of employment. Economic systems also provide the tools by which policy analysts study the possible costs, benefits, and effects of government polices in arrange of areas from national security to health care and education.