Economic Systems

Front

What is an economic system?

Back

An economic system is the way that a society produces, distributes, and uses goods and services.

Front

What is a traditional economy based on?

Back

A traditional economy is based on barter (trade without using money) and subsistence agriculture (farming in which the crops are used only to feed the farmer and his family).

Front

What influences economic decisions in a traditional economy?

Back

Economic decisions are often influenced by tradition and religious beliefs.

Front

Who owns businesses in a market economy?

Back

Individuals (NOT the government) own businesses and make economic decisions.

Front

How are prices determined in a market economy?

Back

Prices are determined by individuals based on supply and demand.

Front

What are other terms for market economy?

Back

capitalism

laissez-faire

free enterprise

Front

Who owns businesses in a command economy?

Back

The government (NOT individuals) owns businesses and makes economic decisions.

Front

How are prices determined in a command economy?

Back

The government (NOT individuals) determines the price of goods.

Front

Which countries used a command economy historically?

Back

Communist countries like the Soviet Union under Joseph Stalin and China under Mao Zedong used a command economy.