Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. Communism- An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production.(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 42)

1.1. North Korea(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 42)

1.2. Pros

1.2.1. -No benefits

1.3. Cons

1.3.1. -Full government control

1.3.2. -No freedom in conducting business affairs

1.3.3. -No small businesses/entrepreneurs

2. Mixed Economy- Economic systems in which some allocation of resources is made by the market and some by the government.(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 43)

2.1. Pros

2.1.1. -Freedom for business owners

2.1.2. -Equality for workers

2.1.3. Environmental protection

2.2. Cons

2.2.1. -High taxes

2.3. The Unites States has a mixed economy.(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 43)

2.3.1. It is important to have an economic system to assure balance to the state of business affairs in a nation. This balance affects capital, growth, trade, work ethics, and government involvement. Lack of balance would cause the nation to conduct business in a way that may have adverse effects on its population or relationships with outside companies that the nation trades with. Having an economic system in place helps a nation assess the business/trade climate of their business affairs to help keep them on track.

3. Capitalism- An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit.(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 34)

3.1. Pros

3.1.1. -Freedom with production/purchasing goods/ selling products

3.1.2. -Many Entrepreneurs

3.2. Cons

3.2.1. -Workers may not be treated fairly

3.2.2. -Not as much of an opportunity for equality in business because this type of economy is very competitive.

3.3. Canada(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 34)

4. Socialism- An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people.(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 41)

4.1. Denmark(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 41)

4.2. Pros

4.2.1. -Equality for all workers

4.2.2. -Good education, healthcare, and less work

4.3. Cons

4.3.1. -No rush to hustle or towards entrepreneurship

4.3.2. -High unemployment rate(Nickels, McHugh, & McHugh, 2019, Chapter 2, Pg. 53)

5. References Nickels, McHugh, & McHugh. (2019). Intro to Business-Understanding Business (11th ed.). Retrieved from The University of Phoenix eBook Collection database.