Global Economic Systems (part 1), WH/EES Standards Labs

Global Economic Systems (part 1), WH/EES Standards Labs

Review:

Last time, we learned about Gross Domestic Product, and how a nation's GDP reflects the health and success of that nation's economy.

Open Ended

Review Question: In your own words, explain what Gross Domestic Product measures, and whether it's better for a country to have a higher or lower GDP.

Today's Learning Goal:

After today's lesson, scholars will be able to describe characteristics of the 4 main economic systems.

Economic Systems

An economic system is how a society makes and sells goods and services. Different societies have different economic systems. The United States, for example, is mostly a capitalist system with some regulation from the government, which makes it a Mixed economic system.

Today, we're going to look at the 4 main types of economic systems: Traditional, Command, Market, and Mixed. These 4 systems have different ways of answering these 3 questions: What goods and services are produced? How are they produced? And for whom are they produced?

Multiple Choice

Every economic system answers three questions: 1) What is produced? 2) How is it produced? And 3) _______________?

• Why is it being produced?

• For whom is it produced?

• Should it be produced?

• How easily can it be produced?

Multiple Choice

An economic system is a society’s system of production, distribution and consumption of...

• natural resources

• goods and services

• stocks and bonds

• factors of production

Video: The 4 Economic Systems

We're going to play the video in a separate window. As the video plays, pay attention to how it describes the 4 main economic systems.

https://www.youtube.com/watch?v=5xgwYRX19VU

Multiple Choice

Which type of economic system do most modern-day societies have?

• Traditional

• Market

• Command

• Mixed

Multiple Choice

True or False: A Market system is driven by consumer choices with no regulation by the government, whereas a Command economic system is fully regulated by the government.

• True

• False

Command vs. Market

In a command economy, like communism, the government owns all factors of production. Because of this, the government decides what is produced, how it is produced and who receives the goods and services they produce.

In a market economy, like capitalism, factors of production are owned by private individuals and businesses. It is up to these independent entities to decide what is produced and how it is produced. With no government involvement, individual consumers decide which goods or services they would like to purchase.

Multiple Choice

In a Market economic system, ___________ controls what is produced, how it's produced, and for whom it's produced.

• The Government

• Individual business leaders / people

Open Ended

Imagine this scenario: A group of businesspeople open a factory in their hometown to produce car parts. The business owners decide which parts and how many to produce based on customer orders.

Does this scenario sound more like it would occur within a Market economic system or a Command economic system? Explain your answer.

Mixed Economic Systems (1/2)

In a mixed economy, like socialism, the answers are a bit less black and white. Certain services are handled publicly. That means the government determines what those services look like, how they are created and who is eligible for which services. On the other hand, since private property is allowed, some private businesses create goods and services that individual consumers can decide to purchase.

There is variety within Mixed economic systems. For example, the U.S. economy is considered a Mixed system, but it's closer to a Market system than a Command system. Other societies (example: Hong Kong) are also considered Mixed, but are closer to a Command system than a Market system.

Mixed Economic Systems (2/2)

Every economic system is theoretical. As a result, these systems do not account for the intricacies of the real world. In theory, a command economy promotes fairness and equal distribution of wealth. In reality, its framework cannot account for greed or unchecked power by those in charge. Similarly, a market economy lends itself a winner-take-all attitude. In reality, there is usually a practical need to support members of society who need financial assistance. Because of this, the vast majority of economic systems around the world are mixed economies. Because capitalist countries like the United States offer publicly-funded social programs and communist countries like Cuba recognize private property, neither country can be considered a purely market or command economy.

Multiple Choice

Who owns factors of production in a command economy?

• Individual citizens

• The government

• Religious institutions

• All of the above

Multiple Choice

Based on the previous passage, why can’t Cuba be considered a purely command economy?

• Cuba recognizes private property.

• Cuba's economy isn't regulated by the government

• Cuba’s economy lends itself to a winner-take-all attitude.

• All economic systems are actually considered a mixed economy.

Today's Learning Goal:

After today's lesson, scholars will be able to describe characteristics of the 4 main economic systems.

Poll

Which of the following best describes how you feel about today's learning goal?

• I'm still confused about what we learned today

• I understand some of what we learned today

• I understand all of what we learned today

• I'm an expert on what we learned today & I could teach the next lesson on this

Open Ended

In your own words, explain what 9th grade scholars need to know about the 4 economic systems (Market, Command, Mixed, and Traditional.)