Economic Types

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Market

Advantage: adjusts easily to change

Command

Advantage: can ensure stability because it does not coincide with buisness cycles

Mixed

Advantage: can focus on social welfare and political freedom, as well as individual liberties

Market

Advantage: capital (money) flows to where it will get the greatest return

Market

Advantage: consumers can buy whatever they like in whatever amount they want

Command

Advantage: distributes wealth among all of society

Market

Advantage: great variety of goods and services

Mixed

Advantage: has advantages from both market and command economies

Market

Advantage: little government intervention

Market

Advantage: prices determined by market forces (supply and demand); competition brings down prices

Command

Advantage: serves people collectively instead of individuals; focus on equality

Command

Also called Communism and/or Socialism

Market

Also called a Capitalist economy

Mixed

Combines elements of pure market and command economies. Government and individuals share the economic decision making process

Market

Competition determines price and increases the quality of products

Command

Consumers have few, if any, choices in the market place

Command

Disadvantage: can often lead to corruption among state planners

Command

Disadvantage: cannot determine societies objective and consumer preferences as well as market can

Command

Disadvantage: cannot easily adjust to change

Market

Disadvantage: does not always provide basic needs of everyone in society, which can lead people to slip into poverty

Mixed

Disadvantage: government intervention can hinder progress

Mixed

Disadvantage: has disadvantages from both market and command economies

Market

Disadvantage: may make it difficult for government to provide adequate social services

Mixed

Disadvantage: may not lead to optimal use of resources

Command

Disadvantage: often there is insufficient resource distribution (shortages and/or surpluses)

Market

Disadvantage: people can make choices which are harmful to themselves and to others

Market

Disadvantage: there are occasionally market failures

Market

Economic decisions are made by individuals competing to earn profits based on supply and demand

Command

Factories are concerned with quotas

Mixed

Government guides and regulates production of goods and services

Mixed

Government serves to protect both producers and consumers from unfair policies and practices

Market

Individual freedom is considered very important; individuals have freedom to make economic decisions

Command

Individuals have little, if any, influence over economic functions

Market

Profit, not quotas, is the motive for increasing work

Market

Resources are owned by individuals

Mixed

Resources are owned by individuals

Command

Resources are owned by the government

Command

The government or other central authority makes all the economic decisions

Command

The government sets the prices of goods and services

Command

There is no competition; the purpose of business is to provide goods and services, not to make a profit


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