Economic Systems Flashcards
Term 1, Year 10
What are the 4 types of economic systems?
- Traditional
- Command
- Market
- Mixed
What is a traditional economy system?
Basic economic system where customs and traditions are predominant elements shaping the way trade and commerce is performed. Allocation of resources stems from ritual, habit or customs. Barter, no money as we know it.
What is a command economy?
Government decides the needs of the people and the best way to produce it for everyone, with no input from the people.
What is a market (free market) economy?
System that relies on the consumption choices made by consumers. Consumers dictate what is produced, how much is produced and how much things cost.
What is a mixed economy?
A mix of all three other economies, with some governement involvement, consumer driven, and some aspects based on traditional values.
