Transcript Political and Economic Systems

Economic System

Tied to the country’s political system.

The way people produce and
exchange goods and services.

4 basic types:
Modern Economic Spectrum
Communism
more government
Socialism
Free Enterprise
less government
Communist Economy
• Also known as
command or
planned economy
• ex) Cuba and North
Korea
Communist Economy
• Government
controls the factors
of production.
• determine job, own
the land, etc.
Communist Economy
• Government
determines the
distribution of
goods and services.
• ration food/supplies,
who can own what
Communist Economy
• Government
provides all basic
needs.
• healthcare, shelter,
etc.
Free Enterprise (Capitalism)
• Also known as
market or capitalist
economy
• ex) U.S.
Free Enterprise (Capitalism)
• Private ownership of
factors of
production.
• People own the
land, businesses,
money, etc.
Free Enterprise (Capitalism)
• Consumer demand
controls production
and distribution.
• things are made
because people
want them
• market
Free Enterprise (Capitalism)
• Government
provides few/no
basic needs.
• social programs,
welfare, etc.
Socialism
• Also known as
mixed economy
• ex) France, India,
China
Socialism
• Major factors of
production owned
by government.
• energy, healthcare,
etc.
• private owners too
Socialism
• Distribution of
goods and services
determined by both.
• a blend
Socialism
• Government
provides some
basic needs.
• healthcare, more
extensive social
programs, welfare,
etc.
• Emphasis on “being
fair” to all.
Levels of economic activities

Just remember the POTATO…
POTATO…
Primary Activities


Getting the raw materials for
immediate use or in the making of a
final product.
fishing, farming,
timber, mining
Don’t be a potato farmer!
Secondary Activities
Adding value to materials by changing
their form.
 Manufacturing
 Mark an advancing
economy.

The people that turn potatoes into french fries.
Tertiary Activities


Providing business or professional
services.
Usually seen in developed economies.
Sell french fries for business.
Quaternary Activities

Provide information, management, and
research services by highly trained
persons.

only in places
with the highest
level of economic
development
Study potatoes and alter them.
No, it’s not real.