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WARM UP!
When decisions about...
What will be produced?
How will it
be produced it?
Who will get what is produced?
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SLOPPY NOTES on reading:
Economics - A Closer Look at the Different Types
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WRAP UP:
If the purpose of a government is to maintain order, and the purpose of an economy is to provide for the society's
needs and desires . . .
Write a journal entry identifying and explaing which system is the BEST.
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NOTES:
DIFFERENT TYPES OF ECONOMIES
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Traditional Economy
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Command Economy
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Key Characteristics
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Decisions made by the Central government
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Consumers and businesses have little control
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Two major types of command economies
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Communism
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Central government owns ALL property
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Why? For the benfit of the people
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Controls all aspects of the citizens' lives
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Few exist today - Cuba, China, North Korea
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Socialism
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Government owns most basic industries
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Why? For the good of the society and not for profit
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Uses any profit for social services (like health and education)
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Other industries and services follow the capitalist model
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Market Economy
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Key Characteristics
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Most businesses are privately owned
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Profit is the motivation
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Consumers drive the economy
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Also involves "capitalism" and "free enterprise"
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"Capitalism" involves the private ownership of resources, BOTH basic and non-basic businesses and industries, and
the use of prices
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"Free Enterprise" is a feature of a market economy in which individuals can start and run their own businesses
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Mixed Economy
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