6.2.4 Economic Systems

• An economic system is a framework that determines how a society organizes its economic activities
• In a market economy, prices guide economic decisions
• Match the economic system with its definition:

  Traditional ↔️ Based on customs and beliefs

  Command ↔️ Government controls resources

  Market ↔️ Supply and demand determine prices

  Mixed ↔️ Combines market and command elements
• In a traditional economy, cultural preservation is a key advantage
• Match the economic system with its key disadvantage:

  Traditional ↔️ Limited economic growth

  Command ↔️ Lack of individual freedom

  Market ↔️ Income inequality

  Mixed ↔️ Bureaucratic inefficiencies
• What is the fundamental purpose of an economic system?

  Address scarcity and unlimited wants
• In a command system, the government owns and controls all major resources
• Order the examples of economic systems from least to most government intervention.

  1️⃣ Traditional

  2️⃣ Market

  3️⃣ Mixed

  4️⃣ Command
• What is a major disadvantage of a command economy?

  Lack of individual freedom
• Mixed economies aim to balance market efficiency with social welfare.


  True
• What is an example of a traditional economy?

  Subsistence farming in rural Africa
• The United States is a purely market-based economy with no government intervention.

  False
• Order the economic systems from least to most government control.

  1️⃣ Traditional

  2️⃣ Market

  3️⃣ Mixed

  4️⃣ Command
• A traditional economic system is based on customs, habits, and beliefs
• Order the economic systems from least to most government intervention.

  1️⃣ Traditional

  2️⃣ Market

  3️⃣ Mixed

  4️⃣ Command
• Mixed economies aim to balance efficiency with equality.


  True
• North Korea is an example of a command economy
• Traditional systems emphasize community needs
• Traditional economic systems encourage specialization and rapid economic growth.

  False
• What guides economic decisions in a market system?

  Prices
• Match the economic system with its key example:

  Traditional ↔️ Tribal communities relying on agriculture

  Command ↔️ Cuba

  Market ↔️ United States

  Mixed ↔️ Canada
• Income inequality is a major disadvantage of the market
• Match the economic system with its key feature:

  Traditional ↔️ Subsistence-level production

  Command ↔️ Central planning by government

  Market ↔️ Prices guide economic decisions

  Mixed ↔️ Government regulation and social programs
• North Korea is an example of a command
• What is a key feature of Sweden's mixed economy?

  Strong social welfare programs
• In a traditional economy, government intervention is minimal, and economic activities are guided by customs.


  True