Four Primary Types of Economic Systems

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Four Primary Types of Economic Systems by Mind Map: Four Primary Types of Economic Systems

1. Traditional

1.1. Is the most basic and ancient of the four systems. It still produces products and services that are a direct result of their beliefs, customs, tradition, and religion. A country similar to a traditional economic system would be Haiti.

1.1.1. Advantage: Does not interact with market/ mixed economies. Disadvantages: It does not enjoy the things other economies enjoy such as technology, and centralized utilities, and western medicine.

1.1.1.1. Pros and Cons: Stable, predictable, and continuous life. Stagnant and lacks progress, and it has a lower standard of living.

2. Market

2.1. Some pros and cons of a market economic system are this system lacks government interference; it has a large variety of goods and services. It does not provide for people who are either too young, old or sick to work.

2.1.1. Similar to a free market, government does not control vital resources and other major segments of the economy. Organizations run by the people determine how the economy runs. A country similar to a market economic system would be Hong Kong.

2.1.1.1. Advantages: Government and market are separated. Disadvantage: In order for system to be successful it must foster constant growth

3. Command

3.1. Largely controlled by government when the country finds itself in possession of a very large amount of resources. The government steps in to regulate these resources, everything industrial, from facilities to equipment. A country similar to a command economic system would be North Korea

3.1.1. Advantage: Capable of creating a healthy supply of its own resources. This system has no shortage of jobs as the government functions similarly to a market economy. Disadvantage: Governments only desire is to control its most valuable resources, so things like agriculture are left to be regulated and run by the people.

3.1.1.1. Pros: Basic education, health, and public services are at little or no cost. Cons: Does not meet the needs of consumers. Lacks effective incentives to get people to work.

4. Mixed

4.1. Also known as a dual economy or a mix of market and command. A country similar to a mixed economic system would be the United States.

4.1.1. Advantages: The economy is free of government ownership, except for a few areas such as education, transportation, and its mail system (USPS). All industries exist in the private sector. Disadvantage: Economy has seen a rise in government power. Not only with imposing of laws and regulations, but by actually gaining control.

4.1.2. The United States has a mixed economic system, a combination of a free market and a command economy. When compared with other countries around the world it is more of a free market.

4.1.2.1. Pros and Cons of a mixed economic system is that it can focus on social welfare and political freedom. Government interference can hinder progress.