Types of Economy

Question 1

What are the three main types of economy?

Answer 1

1. Command economy
2. Free market economy
3. Mixed economy

Question 2

What is the command economy?

Answer 2

Where the government controls every apsect of the country’s economy

Question 3

What country today still has a command economy?

Answer 3

North Korea

Question 4

What does the government do in the command economy?

Answer 4

Set prices for everything
Decide what products to sell
Set wages for everyone

Question 5

What is the free market economy?

Answer 5

When there is no government intervention in the country’s economy

Question 6

Are there any countries today that have a free market economy?

Answer 6

No

Question 7

What happens in a free market economy?

Answer 7

There are no laws on wages so people decide what they get paid
Products are sold at prices people are willing to pay for
The government doesn’t provide any support or benefits
People do not pay the government taxes

Question 8

What is a mixed economy?

Answer 8

When the government has some intervention over the country’s economy but does not have complete control

Question 9

How many countries have a mixed economy?

Answer 9

99.9% of all countries

Question 10

What does the government provide in a mixed economy?

Answer 10

Benefits and support
Pensions
Minimum wage