CP Economics Chapter 2: Economic Systems

In a MARKET economy, individuals and businesses (firms) answer the three basic economic questions of What, How, and For Whom to produce.

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The United States is an example of a TRADITIONAL economy.

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The role of government in a COMMAND economy is to make major economic decisions.

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Japan or the US are examples of COMMAND economies.

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In a TRADITIONAL economic system new ideas are welcome.

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Consumers usually determine WHAT WILL BE MADE in a market economy when they buy goods and, in a way, "vote" for a product.

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Customs and traditions of the people tend to be the deciding factor in what to produce and how to produce it in a COMMAND economy.

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The US is best described as having a modified (mixed) market or modified free enterprise economy.

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The Command economic system tends to provide for the needs and wants of consumers because there are more consumer goods.

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In the COMMAND economy, many basic service costs like education and health are available at little to no cost.

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