Economic system Flashcards
(8 cards)
What are the three fundamental economic questions?
What to produce? For whom to produce? How to produce?
The 5 types of economies
Traditional, market capitalist, planned capitalist, market socialist and planned socialist.
What is traditional economy?
Producers only produce enough to survive rather than on making a profit.
Strengths of traditional economy
Sustainability – Uses natural resources efficiently, often in a way that preserves them for future generations.
Little Waste – Goods and services are produced based on needs, reducing excess production.
Weaknesses of traditional economy
Limited Growth – Lack of innovation and technology slows economic progress.
Limited Trade – Often isolated, with little interaction with other economies.
What is market capitalist?
Producers exchange goods and services with consumers in return for money.
What is planned capitalist?
Individuals own the productive resource, but the government decides what and how to produce and who to produce it to.
What is planned socialist?
An economic system where the government fully controls production, prices, and resource distribution.
