Traditional Economy: Customs, rituals, or habit determine what is produced , Tends to remain stagnant and resistant to change, Revolves around family, Communities typically have low standard of living , Typically lack modern conveniences, Particularly vulnerable to environmental disasters , Often rural and farm-based , Predictable to its participants , Command Economy: Centrally planned economy, Supply and Demand have little effect on production, Citizens have very little freedom and no private property, Government determines what will be produced and who will produce it. , People have very little incentive to be efficient or innovative, Often associated with communism, Government provides housing and health care, Often results in shortages and surpluses, Market Economy : Government stays out of economic matters, Producers produce products according to supply and demand, Consumers are free to buy whatever they choose , Sometimes called the "free market" , Products go to people who have enough money. , Higher standard of living , Product diversity and quality , Competition and profit drive everything, Can lead to unfair business practices, Mixed Economy: Government steps in when it needs to regulate certain aspects of the economy, Producers can produce according to supply and demand but must follow government regulations, Consumers are free to buy what they choose but are subject to government regulations, Mostly flexible with some government intervention, Most countries including the US, have this type of system. ,
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Economic Systems Quiz
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