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Flashcards in Economic Systems Deck (8)
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1

Advantages of Traditional Economy

Only produces what is necessary for its own survival. There is little disagreement over economic goals and roles

2

Disadvantages of traditional Economy

They are less productive because they resist change. The have low productivity because sometimes people are in the "wrong" jobs

3

Advantages of Command Economy

Resources are quickly and effectively mobilized on a large scale. Production rates can be adjusted to meet the exact needs of the population

4

Disadvantages of Command Economy

The government has complete control of businesses which could scare people away from starting one. There is no innovation due to full control of production and sale

5

Advantages of Market Economy

Gives producers an incentive to produce goods that consumers want. Competition pushes businesses to be efficient which keeps costs down and production high

6

Disadvantages of Market Economy

Produces a large gap between the rich and the poor because of skewed income. Unemployment rates go up due to overproduction of goods.

7

Advantages of Mixed Economy

Encourages lesser differences between income. Working will be encouraged as well because of the freedom to obtain property

8

Disadvantages of Mixed Economy

Heavy taxes reduce incentives to work hard or make profits. Can have added costs due to excessive business control