Professional Documents
Culture Documents
HOW ECONOMIC SYSTEMS ATTEMPT TO ALLOCATE AND MAKE EFFECTIVE USE OF RESOURCES
Definition: A FREE MARKET ECONOMY has no government control over factors of production (land, labour, capital) . It is also known as MARKET ECONOMY
A COMMAND ECONOMY does not have a private sector as all resources are owned by the state
A MIXED ECONOMY has both a private sector and a public (state) sector
Mixed economy
combines some features of both a free market economy and a command economy. Nearly every country in the world has a mixed economy
Mixed economy
Advantages:
Private sector made of businesses not owned by government. make own decisions what to produce, how to produce and what price to charge
Mixed economy
In many countries, the government controls the following important
industries/organisations: health education defense public transport water supply electricity supply
What goods and services will be produced? How will these goods and services be produced?
Privatisation
13
Should the government own and control less than it does? In many parts of the world, there has been a very important change in
the balance between the public and private sectors in recent years. Many
governments have sold off businesses they previously owned to new owners in the private sector. This is called privatisation.
Privatisation
14
Privatisation
15
Arguments against privatisation: unprofitable but important services may be closed (eg closing a country bus route or not delivering letters to isolated districts) increasing efficiency to raise profits caused workers to lose jobs creation of monopoly leading to higher prices only few people will benefit from owning the business whereas before privatisation, the whole country could benefit from any profits made
TASK 2A
16
RESEARCH WORKSHOP
1. Identify and explain Viet Nams economic system. 2. Identify the RESOURCES available within Viet Nam. How does the economic
system of Viet Nam attempt to allocate and make effective use of resources available within the country?