Economic Systems

• Traditional (barter)

• Command

• Free Market

• Mixed

Traditional

Advantages? Disadvantages?

Eventually out of need, what was invented?

Advantages? Disadvantages?

Eventually money was produced• Motivation for a form of money?

• A lot easier to carry some form of

vs

Command Economy

Govt makes ALL economic decisions

Pros of Communist system Cons of Communist system

Pros and Cons of Command economy?

http://www.time.com/time/specials/2007/article/0,28804,1658545_1658533_1658030,00.html

http://www.deere.com/en_US/docs/zmags/residential/online_brochures/rle_literature/static/d100_series.html

Free Market Economy

• No govt involvement.

• Prices, wages, etc determined by “Invisible Hand” – i.e. Law of Supply and Demand

Pros? Cons?

Mixed Economy

• Combines elements of Command and Free Market

• Very common economic system today– U.S., Britain, Germany, etc

Pros? Cons?