Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. Capitalism

1.1. This economy is controlled by private owners rather than the Government.

1.1.1. The United States is an examples of capitalism.

1.1.1.1. Pros: Incentives to be rich, encourages innovation, consumers free to choose what products they want, and prevents large bureaucratic government.

1.1.1.2. Cons: firms gain monopoly power and exploit consumers, firms can pay low wages, can damage the environment, and leads to large inequality:

2. Socialism

2.1. This economy is controlled by the community as a whole. The community regulates what is produced, sold and exchanged.

2.1.1. The former Soviet Union and Cuba are examples of socialism.

2.1.1.1. Pros:better allocation of resources, rapid economic growth, stability and social security and welfare.

2.1.1.2. Cons: Loss of consumers, loss of economic freedom, no economic equality, concentration of power, and loss of personal liberty.

3. Communism

3.1. This economy is owned by the Government or a community as a whole.

3.1.1. China and North Korea are examples of communism.

3.1.1.1. Pros:Efficiently distribute resources, cooperation of resources and incentive to participate.

3.1.1.2. Cons: Hard to keep a common goal, blocking out culture and competition which is weakening the economic system.

4. Mixed Economy

4.1. This economy is a mixture of privately and publicly owned products, property, etc.

4.1.1. The United States and France are example of a mixed economy.

4.1.1.1. Pros: Government Regulations, property rights, taxes, national defense.

4.1.1.2. Cons: too much regulation invades growth, social dependency on government programs, and what should government be involved in.

5. The United States is a mixed economy. This means we have a mixture of government owned and publicly owned products, property and ideas. This just means the people of the United States and the Government both have freedoms to own property, businesses and many other things.

6. It's important to have an economic system because if we or other counties did not, there would be no regulations on businesses, property, products how they are sold or when they are sold. It's important to know what your economy needs because you don't want less of a product when there are more people. Or more of a product and not enough people.