Chapter 2.1, Problem 4R

To determine

Name of a country for four different economic systems.

Explanation of Solution

1. Traditional economy: it is a type of economic system in which economic decisions are based on customs and beliefs that have been followed from generation to generation. For instance, if a person’s father is a milkman, that person would also become a milkman. In this system what to produce, how to produce and for whom to produce decisions remain same for upcoming generations.
Example of a country that follows this system is:The democratic republic of Congo.
2. Command economy: in this system of economy, government controls the factors of production and makes all economic decisions.
Example of a country that follows this system is: North Korea.
3. Market economy: in this economic system, individuals owns the factors of production and make economic decisions through free interaction. Individuals focus on their own and their families’ best interest.
Example of a country that follows this system is: Singapore.
4. Mixed economy: this type of economic system includes characteristics of more than one type of economy systems.
Example of this type of economic system is: United States.

Economics Concept Introduction

Introduction:

Economic system refers to the way of using resources to satisfy the people’s needs and wants.

The four common types of economic systems are:

• Traditional
• Command (or controlled)
• Market (or capitalist)
• Mixed