Economic Systems

Question 1

How do economic systems differ?

Answer 1

1. ) WHO owns the factors of production

2. ) The METHOD used to coordinate economic activity

Question 2

The Laissez-Faire System

Remember: PCS

Answer 2

1. ) There is no private ownership of resources.
2. ) Markets and prices coordinate and direct economic activity.
3. ) Each participant acts in his or her own self-interest.

Question 3

Commend Economy

Remember: PC

Answer 3

1. ) There is public (state) ownership of resources.

2. ) Economic activity is coordinated by central planning.