The meaning and development

of economic systems; goals of

economic development

JOHN VINCENT V. ARCINUE

DIFFERENT TYPES OF ECONOMIC SYSTEMS
 TRADITIONAL
 COMMAND / PLANNED
 FREE MARKET
 MIXED

TRADITIONAL SYSTEM
 BASED ON GOODS, SERVICES, AND WORK, ALL WHICH TO
FOLLOW CERTAIN ESTABLISHED TRENDS.
 CAN CENTER AROUND A FAMILY OR TRIBE.
 EXISTS IN A HUNTER-GATHERER AND NOMADIC SOCIETY.
 THEY PRODUCE ONLY WHAT THEY NEED.
 RELY ON BARTER.
 EVENTUALLY EVOLVE.
COMMAND / PLANNED SYSTEM
 THERE IS A DOMINANT CENTRALIZED AUTHORITY,
USUALLY THE GOVERNMENT, THAT CONTROLS A
SIGNIFICANT PORTION OF THE ECONOMIC STRUCTURE.
 COMMON IN COMMUNIST SOCIETIES.
 THE GOVERNMENT CREATES A CENTRAL ECONOMIC PLAN.
 THE GOVERNMENT ALLOCATES RESOURCES ACCORDING
TO THE CENTRAL PLAN.
 THE CENTRAL PLAN SETS PRIORITIES FOR THE
PRODUCTION OF ALL GOODS AND SERVICES.
 THE GOVERNMENT OWNS MONOPOLY BUSINESSES.
 THE GOVERNMENT CREATES LAWS, REGULATIONS, AND
DIRECTIVES TO ENFORCE THE CENTRAL PLAN.

MARKET SYSTEM
 BASED ON THE CONCEPTS OF FREE MARKETS.
 THERE IS VERY LITTLE GOVERNMENT INTERFERENCE.
 REGULATION COMES FROM THE PEOPLE AND THE
RELATION SHIP BETWEEN SUPPLY AND DEMAND.
 MOST GOODS AND SERVICES ARE PRIVATELY-OWNED.
 OWNERS ARE FREE TO PRODUCE, SELL, AND PURCHASE
GOODS AND SERVICES IN A COMPETITIVE MARKET.
  EVERYONE SELLS THEIR WARES TO THE HIGHEST BIDDER
WHILE NEGOTIATING THE LOWEST PRICE FOR THEIR
PURCHASES.
 THE FORCE OF COMPETITIVE PRESSURE KEEPS THE PRICES
LOW.

MIXED SYSTEM
 ARE THE NORM GLOBALLY.
 COMBINES THE CHARACTERICTICS OF THE MARKET AND
COMMAND ECONOMIC SYSTEMS.
 MOST INDUSTRIES ARE PRIVATE, WHILE THE REST,
COMPRISED PRIMARILY OF PUBLIC SERVICES, ARE UNDER
THE CONTROL OF THE GOVERNMENT.
ECONOMIC DEVELOPMENT
 AN INCREASE IN LIVING STANDARDS, IMPROVEMENT IN
SELF-ESTEEM NEEDS AND FREEDOM FROM OPPRESSION
AS WELL AS A GREATER CHOICE.

GOALS OF ECONOMIC DEVELOPMENT

 INCREASE IN REAL INCOME PER HEAD.
 INCREASE IN LEVELS OF LITERACY AND EDUCATION
STANDARDS.
 IMPROVEMENT IN THE QUALITY AND AVAILABILITY OF
HOUSING.
 IMPROVEMENT IN LEVELS OF ENVIRONMENTAL
STANDARDS.
 INCREASE LIFE EXPECTANCY.

REFERENCES:
www.corporatefinanceinstitute.com
www.intelligenteconomist.com
www.thebalance.com