Identifying Economic Systems

Watch this video before answering the questions.

https://www.youtube.com/watch?v=Rtc4oYFR64g

The three economic systems may be identified by the way they answer the basic economic
questions: What to produce? How to produce? For whom to produce?

I. Complete the table below by noting how each of the three economic systems answers
the basic economic questions.

Basic Economic Traditional Economy Command Economy Market Economy

Questions

What to produce? Produce goods and Government control the production are
services that fulfill the production of goods, determined by
needs of the tribe services, and businesses responding
Ex.fish, herbs, grains, employment that is best to the wants and
meat, clothes, tools, for the society rather desires of consumers.
than private individual
Ex. Oils, Military
equipment, and items

How to produce? farming, hunting, government decides the Entrepreneurs factors

fishing, herding, means of production and of production (land,
crafting, weaving, owns the industries and labor, and capital) and
smithing, and gathering manufacturer that combine them in
produce goods and cooperation with
services for the public. workers and financial
backers, to produce
goods and services for
consumers or other
businesses to buy.

For Whom to Produce? the tribe or family Society, people, country consumers.
group.
II. Identify modern countries that have economies that closely resemble each of the three
economic systems. Explain each of your choices.

Economic System Country

Brazil
- Brazil is a country whose primary economy is
Traditional Economy a mix of state-run and market-determined
forces but since it has indigenous people who
live in rainforests that are not part of this
economy. Those people have a traditional
economy based on the goods they produce,
mostly by hand, and exchange with their
neighbors.

North Korea
- has an isolated and tightly controlled
Command Economy command economy and it is a communist
country. The central government/military
makes all economic decisions. Their
government controls the economy and
society through fear of their military
forces. People are divided by their status
and background which affects their
capability of purchasing products. . The
government in North Korea tells worker
what jobs they must fulfill. Mostly their
government heavily invests its money in
increasing military power

Great Britain
- practices a free market economy, which
Market Economy means that buyers and sellers have most of
the decision-making power and is not
restricted by government policies. It has the
highest investment sector, trades, and a a
highly developed social market and
market-orientated economy.