Differentiating Market systems Flashcards
1
Q
The 3 Market Systems
A
- Planned Economy
- Mixed Economy
- Free Market
2
Q
Planned Economy
e.g. North Korea
A
- Government decides on what, how and for whom to produce
- a lot of laws and regulations
- heavy taxes (60 - 70%)
- no competition
- little innovation
- no private companies
- labour protection is high
3
Q
Mixed Economy
e.g. Germany, France
A
- Government provides public goods and services (education, lights, streets, hospitals, health care) when the private sector sees is as unprofitable to do so
- equality, justice, freedom
4
Q
Free Market
e.g. USA, Mexico
A
- Market decides what, how and for whom to produce
- no or few laws and regulations
- no to little taxes
- environment protection is not important
- social inequality
- poverty
- high competition —> innovation
