Other names for this economy are "free enterprise" and "capitalism.". Three basic types of economic system have arisen: that based on the principle of tradition, that based on central planning and command, and that based on the market. Match. The lack of progress in this habitual, customary system may lead to economic stagnation and a lower standard of living compared to other economic systems. Government or tradition, as well as markets, answer some of the questions of what, how, and for whom to produce. Flashcards. Change can happen extremely rapidly and drastically. The government may set wages and decide who will work at which jobs. The government controls the factors of production and makes the basic economic decisions. The Inuit of northern Canada are an example of a culture with this type of economic system. Communism is an example of this economic system. This system combines elements of different economic systems. There is little change in the economy over time. Learn. PLAY. Ancient systems were relatively simple – trade was carried out using barter and there were very few treaties and rules of engagement. Test. An economic system defines how all the entities in an economy interact. Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies. Defining them today is much more complicated than it used to be. Spell. STUDY. Use these flashcards to study and understand the four economic systems (traditional, command, market, and mixed) that we've discussed. As long as you can back up your claims with evidence, you'd be right. There are many ways to interact with these flashcards; you can study from them, make a test, or even play some games! Each economy functions based on a unique set of conditions and assumptions. Write. 2.01 Characteristics of Economic Systems - Free download as PDF File (.pdf), Text File (.txt) or view presentation slides online. Characteristics of Economic Systems. Few of these economies still remain in the world. Varies! Competition and efficiency play an important part of this type of economy. There are many economies around the world. katiepine11. This economic system can be weighed down by bureaucracy. China is a modern-day example of this economic system. There are certain elements of a traditional economy that those in more advanced economies, such as Mixed, would like to see return to prominence.Where Tradition Is Cherished: Traditional economies still produce products and services that are a direct result of their beliefs, customs, tradition… One of the chief goals of people in this type of economy is to make a profit. This type of economy severely limits private property rights. Socialism is an example of this economic system. Economic system, any of the ways in which humankind has arranged for its material provisioning. Tradition, habit, and custom answers the questions of what and how much to produce. There is little freedom to make basic economic decisions. Dollars are cast like "votes" for products, This economic system has a high degree of individual freedom, This economic system has a high degree of uncertainty (example: workers may worry their company will move to another country in search of lower labor costs), Under a pure version of this system, people who are too young, too old, or too sick to earn a living or care for themselves may be left out. Only those products that the government chooses will be available for people to consume. Production techniques are handed down to family members from generation to generation. Use these flashcards to study and understand the four economic systems (traditional, command, market, and mixed) that we've discussed. A system in which private individuals own the factors of production and are free to make their own choices about production, distribution, and consumption. A traditional economic system is the best place to start because it is, quite literally, the most traditional and ancient type of economy in the world. This economic system is easy to understand and reduces the possibility of job-related uncertainties. Everyone takes part in running this economy by freely making economic decisions. The economy of the Unites States is based on this system. Gravity. Basic economic decisions are made according to long-established ways of behaving that are unlikely to change. Each has its own distinguishing characteristics, although they all share some basic features. Created by. North Korea and Cuba are modern-day examples.
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