Types of Economies

Question 1

The decisions are made by individuals and is base on trade. It is also called a free market or capitalism and often lacked regulation and quality. There are no true ______ economies.

Answer 1

Market Economy

Question 2

The government makes all the decisions including what to produce, the controls and redistribution, wealth and resources, and prices and wages. There is no incentive to work hard and is also called a centrally planned economy. An example would be North Korea.

Answer 2

Command Economy

Question 3

It is a combination of market and command economy. The government is in place to assure quality and regulation. An example would be the United States.

Answer 3

Mixed Exonomy

Question 4

It is based on culture and rituals, and is focused on the community as a whole. Everyone pitches in and benefits from others’ efforts. An example would be a traditional Inuit village in North America.

Answer 4

Traditional Economy