Basic Economic Questions
The structure of methods and principles a society uses to produce and distribute goods and services
Economic System
Relies on habit, custom, or ritual to answer the three basic economic questions
Traditional Economy
Effiecient allocation of resources is a benefit of this type of economy
Free Market
With moderate government control this nation operates under a mixed economy, with government involvement being regulated by its bill of rights
United States of America
Societies must decide what to produce in order to satisfy this of a society
Needs and Wants
Answers to the three basic economic questions are made by voluntary exchange
Free market economy
The primary characteristic of this economy is government control of resources and production
Centrally planned Economy
This former Asian Power is known for it Communist government, initiated by Joseph Stalin
Soviet Union
The income people receive in return for supplying factors of production
Favor payments
In this economy the government, rather than individuals, answer the three basic economic questions.
Centrally Planned Economies
A challenge of this type of economy is finding a balance between government intervention and market forces
Mixed Economy
Still a Communist Country Today, this country has slowly started adding in free market policies to aid its economy
China
Public or Private Schools? Oil, solar, or nuclear power? These are just some of the decisions that have to be made when determining this economic questions
How should goods and services be produced
These economies find a middle ground between a market economy and centrally planned economies
Mixed Economies
One of the freest markets in the world, this small nation has little government involvement leading to a strong economy.
Singapore
Determining how much to pay factory owners or teachers is apart of answering this economic question
The two types of Centrally planned Economies
Communism and Socialism
This mixed economy country, leans towards heavy government, and is known to not allow any outside industries into the country.
North Korea