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economic systems
free-market, planned, mixed
| Question | Answer |
|---|---|
| what are the 3 questions which all economic systems must decide answers to? | 1. what is to be produced? 2. how is it to be produced? 3. who gets to consume what is produced? |
| what don't free-market economies have? | a public sector |
| what do free-market economies leave it all up to? | private sector businesses |
| what do free-market economies only produce? | what private sector firms can make a profit from |
| what is an example of a business in a free-market economy? | schools which you have to pay for. only those who can afford it get an education. |
| what are some benefits of a free-market economy? | products should be made efficiently and be high quality, as they only make products which they know they can sell. |
| what are some problems of a free-market economy? | unprofitable things won't get produced. |
| some people may not be able to afford to pay the fees charged, so their education and health will suffer. | |
| what is an example of a free-market economy country? | USA |
| what don't planned economies have? | a private sector |
| what do planned economies leave it all up to? | public sector businesses |
| what are the two other names of planned economies? | centrally planned economies command economies |
| who decide all of the economic decisions? who owns all firms and important resources? | the government |
| what do planned economies only produce? | things which the government believe are in the interest of the people |
| what is an example of a business in a planned economy? | might want to give everyone a job, somewhere to live and free education and healthcare. |
| what are some problems of a planned economy? | too complex for the government to manage it properly |
| firms not required to make a profit and so have no incentive to provide right high quality products | |
| what is an example of a planned economy country? | soviet union before 1989 |
| what do mixed economies have? | a public and private sector |
| what is a benefit of mixed economy countries? | best of both worlds - efficient, competitive firms providing goods and services which people want, public sector providing for their welfare needs |
| what is an example of a mixed economy country? | U.K, most countries |
Created by:
jirwin
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