SS7E1, SS7E4, SS7E7: Economic Systems

An economic system is a way in which people decide to organize the production, distribution, and consumption of goods and services.

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What, how, and for whom to produce are the basic economic questions that every society must answer.

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All societies answer the three basic questions in the same way.

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Most societies have some type of mixed economy.

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In a market economy, only the government decides what goods are produced.

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In a command economy, consumer purchasing decides what goods and services are produced.

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In a command economy, the government decides how the goods will be produced and distributed.

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In a market economy, decisions regarding production and consumption result from the interaction of consumers and producers.

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In a traditional economy, custom and habit determine economic decisions.

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