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Basic Kinds of Economic Systems

 


[1]Never.

 

[2]Nope.

 

[3]Dude. Come on.

 

[4]Of course not

 

[5]Psst — hey, guys! I put this in really small type at the bottom since we all know men have much better vision than women. Ignore the above — the Bro Code is definitely not a piece of fiction. I was simply lying to uphold this very article.

 

[6]Bigger = better

 

[7]Applies only to the first time he retires.

 

[8]Trick question. Bros don't watch ballet

 

[9]Rock, paper, scissors for Bros.

 

[10]Unless a bicycle is the only form of transportation available, like in Southeast Asia or Arkansas or something.

 

[11]To steal your wingman's chick. Big-time no-no.

 

[12]Open bar only.

 

[13]Engaging in a threesome.

 

[14]And beyond, if the Bro discovers there is indeed life after death.

 

[15]Not on the bed.

 

Basic Kinds of Economic Systems

In order to answer the basic economic questions, every society must have some kind of organized set of procedures. This is called the economic system. There are basically three kinds of economic systems in the world. They are (1) traditional economies, (2) command economies, and (3) market economies. Most of the major economies in the world today are actually mixtures of command economies and market economies.

Tradition economies. Traditional economies are found primarily in the rural, nonindustrial areas of the world. Each unit produces most of its own good and consumes what it produces. The basic economic questions of "what," "how", and "for whom" are answered directly by the people involved.

Command Economies. In command economies, the basic economic questions are answered by government officials. Government leaders decide what goods and services will be produced, how they will be produced, and how they will lie distributed. Individuals have little control or influence over the way the basic economic questions are answered. They are told what to produce, how to produce it, and what they will receive. The example is the economy of Cuba.

Market economies. A market economy is the opposite of a command economy. In a market economy, basic economic questions are answered by individual households and businesses through a system of freely operating markets. A market can be defined as the arrangement through which potential buyers and sellers come together to exchange goods and services. The American economy is predominantly a market economy. Other examples include the economies of Canada, Japan, and many of the countries of Western Europe.

Mixed Economies. In actual practice, there are no real economies in the world that rely solely on freely operating markets or on government decisions to answer basic economic questions. All major economies are mixed economies in the sense that some decisions are made through a system of markets, and some are made by the government.

 

 


Date: 2014-12-21; view: 1457


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GLOSSARY | Economics
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