Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. What is an economic system?

1.1. An economic is An organized way in which a state or nation allocates its resources and apportions goods and services in the national community. There are several different types of economic systems. Many are able to identify economic systems like capitalism or socialism, however, there are many categories that is a form of an economic system.

2. Define Economic Systems

2.1. • Capitalism - Economic system based on a free market, profit motive, competition and private ownership of factors of production. • Stagflation – Condition of slow economic growth, rising prices and relatively high unemployment. • Deflation - A persistent decrease in the level of consumer prices. • Communism - Economy with collective ownership of property under a central government. • Socialism - Economy in which key industries are government-owned but private ownership of smaller business is allowed. • Monetary Policy - The regulation of the money supply and interest rates by a central bank. • Fiscal Policy - Increase or decrease in taxes or government spending in an effort to achieve economic stability.

3. Examples of Economic Systems

3.1. • The United States is an example of a capitalist economic system which is based on freedom. • Falling productivity is an example of Stagflation. If an economy experiences falling productivity – workers becoming more inefficient; costs will rise and output fall. • An example of deflation in the united states when we went through the recession between 2007- 2008 • China is an example of communism. All business’s come under the control of the government. • Cuba operates under a socialist economic system. the government determines how everything is distributed. • An example of monetary policy are decreases in the discount rate, purchases of government securities and reductions in the reserve ratio. • An example of a Fiscal policy is when polices need to be changed when an economy is running low on aggregate demand and unemployment levels are high.

4. Pro's and Con's

4.1. Pros of • Communism – Everyone get the same chance for education and employment. • Capitalism – Creates innovate citizens, and it is a society that functions off the services of each. • Socialism – Creates a system without classes, and add stability and balance. Cons of • Communism – Rights of citizens are restricted. • Capitalism – Equal opportunity is forsaken and incentives are non-existent • Socialism – Causes a struggle in employment and can be easily manipulated.

5. United States Economic system

5.1. The United States has a mixed economy. It operates according to an economic system that displays characteristics of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to in economic activities in order to achieve social aims and for the public good.

6. Why do we need an Economic system

6.1. An economic system is the way a country decides who can create goods for sale and to whom the producers can sell the goods and in some cases the prices for which goods may be sold. economic systems are needed for humanity not to revert back to the brutal pillage-and-plunder of our evolutionary ancestors - the apes. For we know that mankind’s superior intelligence, made-up of many unique compositions, using a collaborative approach, can build to strengthen our ability and as a result can serve to prolong mankind’s evolutionary sustainability.