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Jackiellen Bonney!
Economics: Comparing Economic Systems !
4/2/14
Command Economy:!
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A Command Economy is a centrally planned economy, in which the government,
or some other body of power controls the economy. !
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characteristics: The government, the typical body in control of this economy, regulates
and controls production, profits, wages, usage of resources, and other parts of the
economy. This control is used to help increase the benefits of society as a whole, rather
than giving certain groups better benefits over others. !
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advantages: The positive aspects of this economic system are that if the country faces
disease, famine, or other national problems, independent and private members of
society cannot control the supply of needed products, which would further harm the
country. The government regulates the supply and demand system which makes it so
that products are available to all members of the country. !
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disadvantages: The disadvantages are that self interest and incentive are decreased.
The country’s people have less power over the products they make or the price they
think should be put on their products. The free enterprise system no longer has power
or significance in the economy, making most products equal, regardless of the producer
which increases authoritarian mentality. !
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comparison: Unlike the Mixed and Free Market systems, this system has almost all
governmental control over each market, in order to ensure order, balance and success.
This centrally planned economy does not base its rules off of the interests of the people,
but more on what the government believes will be a more effective system.!
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example of place that uses this system: Countries such as Burma, Cuba, Iran, Libya,
and North Korea use the Command Economy as their economic system. Most of these
countries are controlled by a Communist government, which gives the people little to no
power over the economic markets.!
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Jackiellen Bonney!
Economics: Comparing Economic Systems !
4/2/14
Mixed Economy: !
Mixed Economy is a market based economic system in which the government is
involved to some extent. This involvement varies depending on the nation. !
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characteristics: This economic system is directed by private and state groups in order to
ensure benefits to the economy. The basic idea of this system is that production is
controlled mostly by private producers, with the incentive of capital accumulation. The
government however, controls the parts of the economy that deal with avoiding national
crises, decreasing unemployment numbers, and increasing social welfare. !
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advantages: This economic system allows private and independent producers to be
economically successful, while being pushed by the incentive of producing more profit.
They are secure in success, as the government makes regulations that protect the
producers as well as make sure the economy does not endure crisis or supply and
demand issues. !
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disadvantages: The producers are not given full freedom over their prices and rules,
meaning they have less personal freedom and less monopoly over a certain industry.
The government also cannot fully control the producers, leaving a risk of having
producers not comply with the government or society’s demands.!
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comparison: in comparison to the other systems, Mixed Economy is a combination of
Control and Market economy systems. There are some parts of the economy that are
free from governmental control, while other parts are completely controlled by the
government. Both systems are used to ensure not only benefit of the people as a whole,
but benefits to individuals for their certain products. !
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example of place that uses this system: The United States and Canada are two
countries that use this economic system. There are restrictions and freedoms to both
the people and government which makes the economy an almost equal playing field for
both groups. !
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Jackiellen Bonney!
Economics: Comparing Economic Systems !
4/2/14
Free Market Economy:!
Also known as a free enterprise system, investments in firms are made in a free market
by private decision. !
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characteristics: This type of system keeps order, provides necessary services, and
promotes the general welfare of the people. Federal and state laws protect the private
property, while the marketplace operates with limited government regulation. !
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advantages: the advantages of this economic system are that not only does the public
have freedom over what they trade with whom, those that produce products are
protected by the government, making this invisible hand system safe and beneficial to
the people. !
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disadvantages: The disadvantages with this system are that certain producers of
products can gain too much power over the people. Producers can raise their prices as
much as they would like without consequence. If the country ends up going through
issues such as famine, producers can refuse to reduce their prices to benefit the
people, leaving many starving. A similar situation occurred in early Europe, when famine
struck and grain producers refused to lower their prices, which eventually lead to
starvation.!
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comparison: unlike Command Economy, this type of economy is based more on the
idea of supply and demand, and does not require or encourage governmental control
over producers and consumers. !
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Jackiellen Bonney!
Economics: Comparing Economic Systems !
4/2/14
example of place that uses this system: Although America does not use this system as
their overall economic system, free market is the foundation of United States Economy.
People are free to purchase products from companies and businesses that they choose,
and those companies and businesses are free to charge what they would like for their
products. There are no rations or limitations of the American people, and the companies
and businesses are protected by federal rights, as long as they meet the standards that
the government and certain human service programs provide. !
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sources:!
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"~synthesis~." '~synthesis~'. N.p., n.d. Web. 2 Apr. 2014. <http://
interacc.typepad.com/synthesis/page/2/>.
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B., Jim, and M. Hughes. "What are the Characteristics of a Command Economy?."
WiseGeek. Conjecture, 21 Mar. 2014. Web. 2 Apr. 2014. <http://
www.wisegeek.com/what-are-the-characteristics-of-a-command-economy.htm>.
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"Command economy." - Simple English Wikipedia, the free encyclopedia. N.p., n.d.
Web. 2 Apr. 2014. <http://simple.wikipedia.org/wiki/Command_economy
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"Which Countries Have Mixed Economic System?." - Ask.com. N.p., n.d. Web. 2 Apr.
2014. <http://www.ask.com/question/which-countries-have-mixed-economicsystem>.
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"Characteristics of a Command Economy?." - Ask.com. N.p., n.d. Web. 2 Apr. 2014.
<http://www.ask.com/question/characteristics-of-a-command-economy>.
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"Characteristics of a Free Market | Gerard Lameiro." Characteristics of a Free
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thoughts/characteristics-of-a-free-market>.
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"Economic systems." Economic Systems. N.p., n.d. Web. 2 Apr. 2014. <http://
www.economicsonline.co.uk/Competitive_markets/Economic_systems.html>.
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"Planned Economy." wouts -. N.p., n.d. Web. 2 Apr. 2014. <http://
wouts.wikispaces.com/Planned+Economy>.