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• Economic Systems is the way people and nations go about meeting their daily needs. • They all are concerned with producing consumer goods. • 4 Types of Economic Systems *Traditional Economies *Command Economies *Market Economies *Mixed Economies • Based on customs • Trades are passed down through generations • Some families do the same work from generation to generation. • Found in rural/developing nations • Not a lot of technology • Many of the peoples survival depend on this economy. • Main Examples: farming, hunting, and gathering • Government makes all the decisions. • Individuals have little or NO say about the basic economics, such as, how much to produce and what to charge (The government makes these decisions.) • Example: North Korea is a country with a command economy. Communism is an example of a command economy. • Factories must meet a quotas. • Government decides what your occupation will be. • Shortages are common. • There is no competition. • Individuals determine for themselves what to use and they own their own business. • Individuals are competing to make a profit. • Sometimes referred to as capitalism. *Capitalism-economic system that allows private ownership and open competition of business. • • • • Who will want it is the DEMAND How much to produce is the SUPPLY How much to charge is the PRICE Sometimes this economic system is called the “free enterprise system” *Free Enterprise System- economic system that operates on free competition, in which people start and own businesses with limited government intervention. (United States economic system is mostly based upon free enterprise) • Individuals keep the profit. • Competition determines the price and increases the quality of a product. • Government and individuals share the decision making process. • Individuals control SOME aspects of economy. • Government regulates selected industries and restricts others. • Most nations run this kind of economy. • Government protects workers from unfair policies. • Most effective economy for providing goods and services. • Example: United States (Airlines); Government regulates prices or set rules as in the airline industry and companies provide gas and electricity. • US and most European countries have this economy. • Primary Industries • Secondary Industries • Tertiary Industries • Quaternary Industries • Takes natural resources from the earth. *Mining, forestry, fishing, and agriculture • Makes products using the natural resources. (Primary Source) *Construction, factories, and processing plants are in the classification. • Provides a service. *Examples: restaurants, supermarkets, hospitals, education, and emergency services. • Gathers information *Industries in this classification research, gather, and provide information. Differences in Development Industrialized ________ countries hold ___ 97% of all ___________ patent ownerships (rights to inventions). America, Europe, Japan, South Korea, Australia. ________ countries grow only enough ____ food Developing ________ for their own families. Africa, Asia, and Latin America. people from Industrialized countries are using _____ the developing countries to help create economies. Problems facing all Countries • • • • • Increasing __________ populations Pollution ______ Crime fighting Health services ______ Drugs