Economic systems part 2 Flashcards
1
Q
Three types of economic systems
A
- Market Economy
- Centrally Planned Economy
- Mixed Economy
2
Q
Centrally planned economy
A
- Also known as communism or command economy.
- Decisions are made centrally by the gov’t.
- Gov’t controls all elements of the economy and determines how income is distributed.
- Gov’t provides education, health care, employment and housing to ALL members of society.
3
Q
Private property
A
- Ownership is restricted
- Citizens may own small household items and furniture
- Governments own all housing and business
- Governments determine who will work in the business (they set the wages) and where they will live
4
Q
Profit
A
- All profit belongs to the government
- The profit is re-invested into the business or used for social programs such as education and military
5
Q
Competition
A
- Competition is limited
- Government determines the price, quality, style and amount of goods and services
- Consumers have little choice in products sold
6
Q
Advantages
A
- All citizens are assured a minimum standard of living
- Health, education and other social programs are provided free to all
- No unemployment
- Long-term stability
7
Q
Disadvantages
A
- Restriction of individual freedoms
- Little motivation to work hard
- Large military presence
- Lack of innovation
- Corruption
