Economic Systems Flashcards
What is a planned economy
The government or workers council makes all the decisions
In a planned economy who own everything
The government
When would u use a planned economy
To industrialize their wartime economy rapidly. Basically preparing for war
Give 3 examples of countries that still use planned economic systems
North Korea, Cuba, former Soviet Union
Give 3 advantages for a planned economy
Can be very stable, stimulates growth, directs resources for where they may need more
Give 3 disadvantages of a planned economy
No incentive for people to do well, can’t adapt to change quickly, no freedom of choice
What is a market economy
Everything is owned by private people (businesses).
Where does the market economy come from
From the Middle Ages when rich people ( feudal lords ) who owned all the land and controlled the lives of the workers (peasants)
Give 2 advantages of a market economy
Economic freedom, can adapt quickly
Give 3 disadvantages of a market economy
Large wealth gap, focus on profit, businesses have too much control
What is a mixed economy
Mix of private and government owned things
What’s the most used economic system
Mixed economy
Give 3 advantages of a mixed economy
Economic growt is encouraged, encourage welfare, promotes competition
Give 2 disadvantages of a mixed Economy
Economic growth can be limited, corruption
