POB Flashcards
what is an economic system
An economic system can be defined as the way in which the resources of a country are used to produce goods and services.
how can an economic system be characterized
It can be characterized by
Role in the government
-freedom of choice
-ownership of natural human and manifested resources
the functions of economic systems
-the promotion of economic progress
-the maintenance of economic stability
-the organization of produce
types of economic systems
-planned economic system
-mixed economic system
-traditional economic system
What is a traditional economy?
A traditional economy is an economic system based on customs, traditions, and cultural beliefs, rather than money.
adv and disadv of a traditional economy
Adv- every member of society knows exactly what they are to do.
disadv- this type of society is often very slow to change
What is a planned economy?
A planned economy is an economic system where the government controls and directs all economic activity.
eg. production, investment.
adv and disadv of planned economy
adv- the welfare of all citizens is the primary goal of the economic system
- there is full employment of all available
disadv- there is no freedom of choice for the consumer or producer.
what is the mixed economy?
A mixed economy is an economic system that combines aspects of a free market with elements of a planned economy.
adv and disadv of mixed economy
adv -Mixed economies allow more freedom than command economies.
disadv- Wealth is not distributed evenly, which can lead to economic inequality.
how can an economic system be charaterized
a role in the governmet
freedom of choice
ownership of natural human and maufactured recorses
