Economic Definitions

1. Economic Systems
The Four Types

2. The Four Types of Economic Systems
 Four very different types of Economic
Systems have evolved as different societies
have placed different emphasis on different
goals and priorities in their efforts to answer
the Three Key Economic Question.

3. Traditional Economy
 Family or Community
based Economic
System that relies on
custom and ritual to
make its choices.
 Examples:
 Aborigines
 Amazon Tribes
 Any Substainance
Economy

4. Market Economy
 Individual or Consumer
based Economic System
that relies on the
consumption choices of
consumers.
 Examples:
 *The U.S.A.?
 *Japan?
 Any Capitalist Economy?
 * Indicates that the country
leans that way as there are no
wholly free market economies in
practice

5. Command Economy
 Centrally Controlled
Economy where the
Government makes all
decisions.
 Examples:
 Cuba
 China
 Any Communist
Country or Dictatorship

6. Mixed Economy
 Economic System that
incorporates some
Governmental
involvement into a Market
Based Economy.
 Examples:
 *The U.S.A.?
 *Japan?
 Most “Modern”
Economies