Different economic systems

• What are different economic systems

  How economies are classified. Real world (e.g.s), economic theory behind them,
• Free good 


  we are not willing to pay for ie. we are not willing to give something up in return for it - it has no Opportunity Cost in production.
• Economic good 


  we are willing to pay for, i.e. we are willing to give something up to have it - economic goods involve an Opportunity cost in production
• What are most goods- free or economic

  Economic
• Are most free goods natural or physically made


  Natural
• In the UK, who makes decisions?

  Government and private sector
• What are the tree types of economies

  1. planned economy aka command economy- all economic decisions made by government
  2. Mixed economy - 40-60% of production decisions made by Government (split between public and private)
  3. Free Market Economy - less than 40% of production by Government - dominated by the private sector (supply and demand)
• What are all world economies?

  All world economies are mixed but to varying degrees
• command economy examples

  Government regulates prices, wages
• Free economy Examples

  What services or goods to provide and sell
• Market/Mixed economy 


  Consumer choices and government control
• Who is J M Keynes

  19th Century economist said society needs state regulation of the economy - no more self adjustments. For the prosperity of the economy: spend as much money as possible, stimulate aggregate demand growth
• Traditional economic theory - Adam Smith

  Market would figure itself out and solve its own issues without intervention
• F.A. Hayek - what economic theory did he believe in?

  Neo Classical economics - free market capitalism