Market Economy Definition: Decisions on producing and consuming
goods and services are based on what people want to buy and/or sell
(a.k.a. supply & demand). Pro: People are free to make their
own choices about what services or products to purchase. Con:
Market outcomes may not be equitable. Short Supply of Gas +
Increase in Gas Demand = Price increase Ample supply of gas +
Little to no demand = Price decrease
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Market Economy Examples CanadaUnited Kingdom
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Command Economy Definition: The government controls what is
produced and how it is produced. The government owns the resources
and decides who gets the products. Pros: Command economies can
prevent abuse of large companies and can prevent mass unemployment.
Cons: Limits the rights and freedoms of citizens. If there were a
shortage of gas in countries with a command economy, the government
could ban citizens from buying gas in order to save it for
government vehicles.
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Command Economy Examples North KoreaCuba
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Mixed Economy Definition: A mixed economy means that part of
the economy is left to the free market, and part of it is run by
the government. Pros: A mixed economy can create greater equality
and provide a safety net to prevent people living in absolute
poverty. Cons: Can be difficult to know how much governments should
intervene. In reality most economies are mixed, with varying
degrees of state intervention.
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Mixed Economy Example The United States of America
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Traditional Economy Definition: An economy in which people make
their own products and is based on customs, traditions, and
economic roles that are typically passed down from one generation
to the next. Pros: A sense of community within the economy and
income equality. Cons: Lack of modernization, lack of personal
gain, and lack of freedom. Tribal communities trading goods with
one another is a good example of this.
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Traditional Economy Examples EskimosThe Amish
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In your notebook. Economy TypeDefinition (In your own words)
Pros/ConsExample(s)