Economic systems

Question 1

What is a market economy?

Answer 1

•Govt. allows market forces to determine most of the characteristics of the economy and the workforce

Question 2

Name two countries that have a market economy

Answer 2

US and us XD

Question 3

What are the 5 elements of a market economy?

Answer 3

1. consumer can purchase nearly anything they want 2. demand for products sets the price 3. production strives to be more cost efficient 4. if there is no demand, there’s no product 5. some good - public goods - are provided through govt. subsidies

Question 4

What is a command economy?

Answer 4

• central govt. makes most decisions and so controls the economy - supply to production including the workforce

Question 5

Name two countries that have a command economy

Answer 5

China and North Korea

Question 6

What are the 6 elements of a command economy?

Answer 6

1. govt. controls supply and cost 2. govt. does not give consumer choose which items are produced or imported 3. choice is limited to govt. set items 4. public services are provided by the govt. at 0 cost 5. medical care, edu and housing may be provided by govt. 6. govt. may allocate you jobs