Economic Systems

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Economic Systems by Mind Map: Economic Systems

1. Socialism

1.1. Socialism is an economic and political system where the ways of making a living (factories, offices, etc.) are owned by the workers who run them and the people who depend on them.

1.2. Country that use Socialism are the Federal Democratic Republic of Nepal, The Republic of Nicaragua, Portuguese Republic, Democratic Socialist Republic of Sri Lanka.

1.3. Socialism calls for putting the major means of production in the hands of the people, either directly or through the government. Socialism also believes that wealth and income should be shared more equally among people.

1.4. The former Soviet Union is an example of a socialist system. Cuba is an example of a socialist nation. Its economy is state run and it lacks a stock exchange. ... The country of North Korea is a socialist state, lacking a stock exchange, supporting many social programs, and the economy is state-run.

1.5. Command economy advantages include low levels of inequality and unemployment, and the common good replacing profit as the primary incentive of production.

1.6. Disadvantages of socialism include slow economic growth, less entrepreneurial opportunity and competition, and a potential lack of motivation by individuals due to lesser rewards.

2. Communism

2.1. Communism is an ideology of economic equality through the elimination of private property. The beliefs of communism, most famously expressed by Karl Marx, center on the idea that inequality and suffering result from capitalism

2.2. Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.

2.3. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system and competitive markets.

2.4. While China, North Korea, Vietnam, Laos, and Cuba officially claim to be communist states, the country that adheres most strictly to communist principles, according to Oxford University scholar Robert Service, is North Korea

3. Capitialism

3.1. Capitalism is defined as an economic system in which a country's trade, industry, and profits are controlled by private companies, instead of by the people whose time and labor powers those companies.

3.2. The United States is mostly capitalistic.

3.3. Countries that us the Capitalist system are The United States of America, Canada, Chile, Germany, The United Kingdom, Japan, South Korea, Bangladesh.

3.4. Cons of capitalism Monopoly power. Private ownership of capital enables firms to gain monopoly power in product and labor markets. Social benefit ignored. Inherited wealth and wealth inequality. Inequality creates social division. Diminishing marginal utility of wealth. Boom and bust cycles.

3.5. One of the biggest criticisms against capitalism is that it is much too focused on profit. As such, it may lead to social and economic inequality. While some may consider the chance to produce superior products, there is a cycle of boom and bust in markets.

4. Mixed

4.1. In a mixed economy both market forces and government decisions determine which goods and services are produced and how they are distributed. Welfare refers to government efforts to provide for people's basic needs.

4.2. A mixed economy consists of both private and government/state-owned entities that share control of owning, making, selling, and exchanging good in the country. Two examples of mixed economies are the U.S. and France. A mixed economy moniters the power of monopolies.

4.3. Advantages of Mixed Economy It promotes a quick economic development. It creates a balance in regional developments. It encourages lesser income inequality. It provides the freedom to own a private property. It brings about the fear of nationalization. It could risk the government to go too far.

4.4. One disadvantage of mixed economies is that they tend to lean more toward government control and less toward individual freedoms. ... Another negative is that the government decides the amount of tax on products, which leads to people complaining about high taxes and their unwillingness to pay them.

4.5. Countries with a mixed economy include Iceland, Sweden, France, the United Kingdom, the United States, Russia and China. These countries have a mix of government spending and free-market systems based on the share of government spending as a percentage of gross domestic product.

5. Traditional

5.1. They are often in Africa, Asia, Latin America, and the Middle East.

5.2. Disadvantages are it isolates the people within the economy. Large outside economies can overwhelm a traditional economy. It offers few choices. There may be a lower overall quality of life. It creates specific health risks. Unpredictability creates survival uncertainties.

5.3. Traditionalist depend on agriculture, fishing, hunting, gathering, or some combination of the above. They use barter instead of money. Most traditional economies operate in emerging markets and developing countries.

5.4. Advantages of a Traditional Economy Traditional economies produce no industrial pollution, so they keep their living environment clean. Traditional economies only produce and take what they need, so there is no waste or inefficiencies involved in producing the goods required to survive as a community.