Economic systems Flashcards
Explain what a Traditional/Subsistence Economy is and how it works.
A traditional/subsistence economy produces what is necessary with little waste and is based on small communities, families and tribes. They rely on barter which is essentially a trade that exchanges one commodity for another. The government in this economy has very limited control.
Explain what is a Market/Capitalist Economy and how it works.
A market/capitalist economy is where private individuals own a majority of resources based on their own self interest. In a genuine capitalist economy, the government would try to remain out of the economic process to the fullest extent.
Explain what is Socialist Leaning/Mixed economy is and how it works.
A Socialist Leaning/Mixed economy has most of their resources owned by the state where most of the economic producers and consumers can negotiate. There is a certain level of economic freedom on this economy as the government can prevent discrimination and monopolies although allow the market to determine prices, supply and demand
Explain what a Planned Economy/Communism is and how it works.
In a Planned/Communist economy, most resources are owned by the government where they also utilize the scare resources in the manner that feels best for all. The government in this economy has ownership and control over all means of production.
What type of economic system does Australia have? How does it run?
Australia has a variation of a Mixed economy called the Modified Market Economy where it’s run by itself but includes significant influence and participation by the government.
How does the Australian government influence the market through.
The Australian government influences the market through laws and taxes, being a major employer(school and health in particular) running it’s own business (aus post) and changing their spending patterns in the annual budget.
