Module 1: Economic Systems in Canada and the United States
Section 1: Market and Mixed Economies
Lesson 2 - Page 2: Market Economy (ch 6)
In the lesson inquiry you explored the metaphor of the untamed wild, a game reserve, and a zoo as economic environments. Work through the Economic Systems to further examine this metaphor and different economic systems.
Command (Planned) Economy:
The command economy at the far left of the economic continuum is a government controlled economy, much like the zoo, where the animals are totally dependent on the zoo keepers to provide their basic needs and make most of the decisions. The zoo keepers’ decisions impact and maintain the animal’s quality of life. In a command economy, the government makes the decisions, and consumers have very little to no influence on economic decisions.
The government makes all the decisions about how to solve scarcity. It owns and manages the resources needed to produce things. It plans what will be produced and decides how to use limited resources.
Characteristics:
The command economy at the far left of the economic continuum is a government controlled economy, much like the zoo, where the animals are totally dependent on the zoo keepers to provide their basic needs and make most of the decisions. The zoo keepers’ decisions impact and maintain the animal’s quality of life. In a command economy, the government makes the decisions, and consumers have very little to no influence on economic decisions.
The government makes all the decisions about how to solve scarcity. It owns and manages the resources needed to produce things. It plans what will be produced and decides how to use limited resources.
Characteristics:
- resources are publicly owned.
- gov’t makes decisions on how to use resources
- individual consumers have little influence on economic decision making
Market Economy:
On the far right is the untamed wild where it is survival of the fittest for these animals. In a true market economy, there is no government intervention. Individuals make economic decisions. Values and beliefs help an individual make decisions that ultimately determine quality of life.
Market Economy:
On the far right is the untamed wild where it is survival of the fittest for these animals. In a true market economy, there is no government intervention. Individuals make economic decisions. Values and beliefs help an individual make decisions that ultimately determine quality of life.
Market Economy:
- The choices of individuals solve scarcity.
- Private businesses own and manage resources
- They sell their products to consumers, who make their own decisions about what to buy.
- Businesses succeed if they produce what consumers want. Otherwise, they fail.
- The gov’t does not get involved.
- Resources are privately owned.
- Individuals make decisions on how to use resources.
- Individual consumers drive economic decision making by choosing what to buy.
Mixed Economy:
The game reserve falls in the middle: Animals are protected to some degree but are allowed to roam freely. In a mixed economy, there is some government decision making as well as economic freedom where individuals make independent decisions. Therefore, the government and the individual will both determine quality of life.
Mixed Economy:
Combines private ownership and gov’t control. The level of gov’t involvement fluctuates depending what political party is in power
Characteristics:
The game reserve falls in the middle: Animals are protected to some degree but are allowed to roam freely. In a mixed economy, there is some government decision making as well as economic freedom where individuals make independent decisions. Therefore, the government and the individual will both determine quality of life.
Mixed Economy:
Combines private ownership and gov’t control. The level of gov’t involvement fluctuates depending what political party is in power
Characteristics:
- some resources are publicly owned and some are privately owned
- individuals and gov’t both make decisions about what to produce
- individual consumers and gov’t influence economic decision making
A mixed economic system and a market economic system are the two most common economic systems in the world. At one point, the command or planned economic system was much more common and was a great influence on the world’s economy. China was once a command economy but has shifted toward a more mixed economy.
In government, different political parties vary in their values and beliefs about how much government control there should be. What political party has been elected will determine how much government spending occurs.
The United States economic system is founded on capitalism, where the goal is minimal government control and minimal spending on the economy. China’s economic system, by contrast, is based on socialism, where there is more government control and more spending.
In class economic systems Power Point
Review
market economy: an economic system in which individuals are free to make their own decisions with little or no intervention from the government and where resources are the private property of persons or companies
mixed economy: an economic system in which both the public and the private sectors play a significant role in the economy and where some resources are owned by the private sector and some by the public sector
command or planned economy: an economic system where resources are publicly owned (e.g., the part of the economy owned and controlled by the government and paid for by taxes) and the government makes decisions on how to use the resources
mixed economy: an economic system in which both the public and the private sectors play a significant role in the economy and where some resources are owned by the private sector and some by the public sector
command or planned economy: an economic system where resources are publicly owned (e.g., the part of the economy owned and controlled by the government and paid for by taxes) and the government makes decisions on how to use the resources
Assignment
What are some examples of the economies and political structures in other countries? For example, North Korea and Cuba, with communist political structures, are close to the left end of the continuum. The United States is closer to the right with a more capitalist political structure. Canada falls in between with moderate government support of the economy.
Open an Internet web browser and search engine. Enter the key search terms “CIA World Factbook.” Choose the name of a country on the drop-down menu. From the “Categories” menu, first select and read about “Government.” Then choose “Economy.” Investigate the government structures and economies of at least six countries. Try to explore countries from different continents.
In your notes, draw an economic continuum like the one earlier in this lesson that demonstrates government structure and economic systems. Place the six countries you have identified on the continuum. Save this activity to your Portfolio.
Open an Internet web browser and search engine. Enter the key search terms “CIA World Factbook.” Choose the name of a country on the drop-down menu. From the “Categories” menu, first select and read about “Government.” Then choose “Economy.” Investigate the government structures and economies of at least six countries. Try to explore countries from different continents.
In your notes, draw an economic continuum like the one earlier in this lesson that demonstrates government structure and economic systems. Place the six countries you have identified on the continuum. Save this activity to your Portfolio.
In Our Blog
Post your economic continuum to our blog course discussion area. After reading other postings, determine if you need to revisit the placement of the countries on your economic continuum.