Four Primary Types of Economic Systems

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Four Primary Types of Economic Systems by Mind Map: Four Primary Types of Economic Systems

1. Command

1.1. Largely controlled by government when the country finds itself in possession of a very large amount of resources. The government steps in to regulate these resources, everything industrial, from facilities to equipment. A country similar to a command economic system would be North Korea

1.1.1. Advantage: Capable of creating a healthy supply of its own resources. This system has no shortage of jobs as the government functions similarly to a market economy. Disadvantage: Governments only desire is to control its most valuable resources, so things like agriculture are left to be regulated and run by the people. Pros: Basic education, health, and public services are at little or no cost. Cons: Does not meet the needs of consumers. Lacks effective incentives to get people to work.

2. Mixed

2.1. Also known as a dual economy or a mix of market and command. A country similar to a mixed economic system would be the United States.

2.1.1. Advantages: The economy is free of government ownership, except for a few areas such as education, transportation, and its mail system (USPS). All industries exist in the private sector. Disadvantage: Economy has seen a rise in government power. Not only with imposing of laws and regulations, but by actually gaining control.

2.1.2. The United States has a mixed economic system, a combination of a free market and a command economy. When compared with other countries around the world it is more of a free market. Pros and Cons of a mixed economic system is that it can focus on social welfare and political freedom. Government interference can hinder progress.

3. Traditional

3.1. Is the most basic and ancient of the four systems. It still produces products and services that are a direct result of their beliefs, customs, tradition, and religion. A country similar to a traditional economic system would be Haiti.

3.1.1. Advantage: Does not interact with market/ mixed economies. Disadvantages: It does not enjoy the things other economies enjoy such as technology, and centralized utilities, and western medicine. Pros and Cons: Stable, predictable, and continuous life. Stagnant and lacks progress, and it has a lower standard of living.

4. Market

4.1. Some pros and cons of a market economic system are this system lacks government interference; it has a large variety of goods and services. It does not provide for people who are either too young, old or sick to work.

4.1.1. Similar to a free market, government does not control vital resources and other major segments of the economy. Organizations run by the people determine how the economy runs. A country similar to a market economic system would be Hong Kong. Advantages: Government and market are separated. Disadvantage: In order for system to be successful it must foster constant growth