Download - Economics
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The Nature of Economic SystemsLESSON 9 | PP. 84-87
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Economic System
A structure of governance that deals with the different economic activities
to answer the basic questions on the needs of the economy.
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Traditional Market Command
ECONOMICSYSTEMS
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TRADITIONALEconomy
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ROLES
INDIVIDUAL
Decide
Society basesEVERYTHING on traditions.
TRADITIONS
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Traditional Economy
EXAMPLE: A farmer engaged in
the production of rice did exactly what his father did when he was also planting rice before.
Does not require progress
Using methods used by his ancestors
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Traditional Economy
The SOCIETY decides, not the INDIVIDUAL.
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MARKET
ECONOMY
FeudalismMercantili
smCapitalism
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WHAT?HOW? FOR
WHOM?
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MARKETArrangement between the
SELLERS and the BUYERSto make a TRANSACTION.
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Market Economy
Indicator:
CONSUMER’S
DEMAND
HIGH PRICE=In demand
=increase production
LOW PRICE= not in demand
=decrease produuction
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FEUDALISM1
Fief ManorSerf
Feudal LordVassals
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Feudal LordVassals
FIEF
Service
LAND
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Manorial System
Manor•Center of agricultural economy
Serf• slaves
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Feudalism
The basis of man’s POWER depends on
the ownership of extensive land.
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MERCANTILISM
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BRITAIN FRANCE
SPAIN NETHERLANDS
Gold & Silver measures power & Supremacy.
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CAPITALISM
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Capitalism
Ownership forProduct
ion
Land
Capital
Entre-prene
ur
LaborPrivate Property
Profit Motives
Foundations:
Free Enterprise orFree Market System
AKA:
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“Property is allowed without limitations”
Ownership of Resources & Wealth1
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“Decision-making is DECENTRALIZED”
Decision-Making11
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“Pricing depends on the prevailing price in the MARKET”
Pricing111
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CommandEconomy
Communism
Socialism
Facism
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Command EconomyAll economic activities
are planned by
authority.
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Command Economy
Government owns and controls all factors for production.
Individual preferences are not considered
PRINCIPLE: Interests of society
should prevail over that of the individuals.
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Communism
Father of CommunismKarl Marx
EQUALITY
CLASSLESS SOCIETY
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Communism
Father of CommunismKarl Marx
“From each of us according to
abilities, to each of us according to
needs.”
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Communism
Father of CommunismKarl Marx
The STATE owns ALL the
RESOURCES of the country.
PrivateProperty
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Socialism
Capitalism CommunismPrivate Property
Private Property
? ? ?Main
industries controlled by
the state
Individuals own small industries
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Facism
Capitalism DictatorIndustries are
controlled/owned by the state
under a
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Facism
“The people are for the state, not the state for the
people.”
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Economic Systems
Traditional Market
Feudalism|Land & Service|
Mercantilism|Gold & Silver|
Capitalism|Private Ownership|
Command
Communism|State Ownership|
Socialism|Private & State|
Facism|Dictator|