ECONOMIC Nature/ Advantage Disadvantage Model countries

SYSTEM characteristic

Traditional a system that The traditional Starvation: Brazil, a country

Economic relies on economy offers People may whose primary
System customs, history, less of a threat starve from food economy is a
and to the shortage if there mix of state-run
time-honored environment is a lack of and
beliefs. Tradition than another agricultural, market-determin
guides economic market system. hunting, or ed forces. Yet
decisions such People in the fishing produce. inside Brazil are
as production economy have Risk of pockets of
and distribution. conventional Exploitation: indigenous
Traditional occupations like Developed people,
economies farming, fishing, economies. read particularly
depend on hunting or more often those who live in
agriculture, cattle-rearing. invade the Amazon
fishing, hunting, There is no underdeveloped rainforest, who
gathering, or wastage in the economies to are not part of
some traditional exploit the land this economy.
combination of economy and natural
the above. They because the resources.
use barter people in the
instead of economy
money. consumes
whatever they
produce or
gather.

Socialism-Com A command low levels of Disadvantages In communist or

mand economic economy is a inequality and of command socialist nations,
system system where unemployment economies such as
the government and the common include lack of modern-day
has total control objective of competition, North Korea, this
over the replacing profit which can lead type of
economy it with equality as to lack of economic
reigns over. the primary innovation, and system is a
Characteristics incentive of lack of significant
of this economy production. efficiency. element. The
include former Soviet
governmental Union, Cuba,
control of wages and North Korea
and pricing, all have
limited property command
rights, economies.
government
ownership of key
businesses and
industries, and
 robust black
markets.

Capitalism – Capitalism is an Consumers Without Examples of

Market economic enjoy a wider government capitalist
economic system that choice of regulation, countries
system focuses on a products and owners can act include:
free market to services since without concern
determine the the system for the effects of Hong Kong
most efficient allows firms to their technology Singapore
allocation of compete with on the New Zealand
resources and other companies government or Switzerland
sets prices in the economy. the general Australia
based on supply Businesses are welfare and
and demand. given a greater safety of their
Capitalism has incentive to work workers. In a
many unique hard since they capitalist
features, some get to enjoy the economy,
of which include profits they exploitation of
a two-class generate by workers is
system, private determining the common since
ownership, a means of the goal is to
profit motive, production. mass-produce
minimal high-quality
government goods at low
intervention, and costs. It means
competition. that workers
often work long
hours for low
wages to keep
costs of
production low.
Furthermore, the
division between
these workers
and the owners
creates
inequality and
class division.
Furthermore, a
division exists
between the
owners and
those who lack
competitive skills
and cannot work
(the elderly, sick,
unskilled

Mixed Economy A mixed In a mixed The mixed Examples of

economy has economic economy mixed
three of the system, free encourages economies
following markets co-exist people and Iceland (57%)
characteristics of with government agencies to go Sweden (52%)
a market intervention, and into debt. One of France (52.8%)
economy. First, private the most United Kingdom
it protects enterprises prominent (47.3%)
private property. co-exist with dangers of the United States
Second, it allows public mixed economy (38.9%)
the free market enterprises. The is overdevelop- Russia (34.1%)
and the laws of advantages of a ment. This India – (27%)
supply and mixed economy disadvantage China – (20%)
demand to include efficient occurs in the
determine production and centralized
prices. Third, it allocation of planning of the
is driven by the resources, as public sector
motivation of the well as most often, but
self-interest of improvement of individuals and
individuals. social welfare. companies can
also fall into this
debt trap.