Economic Systems Essay

663 Words Aug 24th, 2013 3 Pages
Lindolfo Lazareth Mireles III
AP Macroeconomics – 1B
Mr. W. English
2 September 2013
Traditional Economy VS Command Economy
In economics we study how individuals and society seek to satisfy needs and wants through incentives, choices, and allocation of scarce resources. We know that we cannot have everything, we have to make choices. We then asked ourselves, “How will society choose between what they do and don’t have?” that’s why economic systems were created. They were created specifically to answer the three economic questions. What should we produce? How should we produce it? And Who should get it? There’s different ways we can answer these questions, it all depends on the economies goals and values.
The first type of economy I
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Communism would be an example and this is like China, Cuba or the Former Soviet Union. In a Moderate Command Economy is where some form of private enterprise exists but the state owns major resources. This is a socialism type of government and this is like France and Sweden. The disadvantages is that you have minimal choices in this economy because the government is deciding what to make, they won’t just make what a few people want, they’re going to make what the majority of the people want or maybe just what the majority needs. There are fewer choices in product and there’s no opportunity to engage in entrepreneurship. The advantages are that it creates and guarantees an equal standard of living for everyone, which is in theory because corruption can exist and mess this up. There is also less crime and poverty, in theory if the economy does well, there will be no need to commit crimes such as stealing. Also, the needs are provided for through the government, in theory again because this assumes that the government knows what you need
All the four different types of economic systems answer to the three economic questions. What should we produce? How should we produce it? And who should get it? Each one is different because each country chooses a different kind of economic system because they have different goals and different things that they value. In a command economy for example, what the people value

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