ECONOMIC SYSTEMS

SYSTEMS
ECONOMIC
REPORTER:
CEDRON, SHIELA G.

ECONOMIC SYSTEMS
Economic system
system is
is aa
Economic
system adopted
adopted by
by aa
system
society that
that organizes
organizes the
the
society
production, distribution
distribution and
and
production,
consumption of
of goods
goods and
and
consumption
services.
services.

ECONOMIC SYSTEMS
An economic
economic system
system is
is aa
An
set of
of economic
economic
set
institutions that
that dominates
dominates
institutions
given economy.
economy.
aa given

What is
is the
the principal
principal
What
objective of
of an
an economic
economic
objective
system?
system?
to solve
solve the
the basic
basic economic
economic
to
problems
problems

Basic economic
economic questions
questions
Basic
What?
What?
..
How?.
How?.
Who/m
Who/m
?.
?.

Main types
types of
of Economic
Economic
44 Main
System ::
System
Traditional Economic
Economic
Traditional
System
System
Market Economy
Economy
Market
Command Economy
Economy
Command
Mixed Economy
Economy
Mixed

TRADITIONAL ECONOMY
ECONOMY
TRADITIONAL
SYSTEM
SYSTEM
Economic decisions are
made based on customs
and traditions.

agrarian

agrarian

Characteristics:
Characteristics:
It is based on agriculture,
fishing, hunting,
gathering or combination.
It is guided by traditions
It may use barter instead
of money

Advantage:
Advantage:
Traditional economies are
usually less destructive to
the environment, and are
therefore sustainable.

Disadvantage:
Disadvantage:

Very vulnerable to changes in

nature, especially the
weather.
They are more vulnerable to
market or command
economies that have superior
resources to wage or take
away needed natural

MARKET ECONOMY
ECONOMY
MARKET
Economic decisions are
made by the market
system or simply the
demand and supply
condition.

Characteristics:
Characteristics:

Private property
Freedom of choices
Motive of self-interest
Competition
System of markets and
prices

Advantage:
Advantage:
It ensures the most
desired goods and
services are produced
Good and services are
produced in the most
efficient way possible.

Advantage:
Advantage:
Innovation is rewarded.
The businesses and
individuals who are most
efficient and innovative
will accumulate more
capital.

Disadvantage:
Disadvantage:
A market economy
functions through
competition.
Rewards those who are
good at being
competitive.

COMMAND ECONOMY
ECONOMY
COMMAND
Economic decisions are
made by the government.

Characteristics:
Characteristics:
The government creates a
central economic plan for
all sectors and regions of
the country.
The government allocates
all resources according to
the central plan.

Characteristics:
Characteristics:
The central plan sets the
priorities for production of
all goods and services.
The government owns a
monopoly business in
industries deemed
important to the goals of
the economy.

Characteristics:
Characteristics:
The government creates
the laws that regulate
economic activity.

Advantage:
Advantage:
Centrally planned
economies are great at
mobilizing economic
resources quickly,
effectively and on a large
scale.

Advantage:
Advantage:
Command economies are
also good at wholly
transforming societies to
conform to the planner's
vision

Disadvantage:
Disadvantage:
Command economies
mow down other societal
needs.
Command economies
often produce too much
of one thing and not
enough of another.

Disadvantage:
Disadvantage:
Command economies are
not good at stimulating
innovation.
Centrally planned
economies also have
trouble producing the
right exports at global
market prices.

MIXED ECONOMY
ECONOMY
MIXED
A mixed economy seeks to
have all the advantages of
a market, command and
traditional economy with
little of the disadvantages.

Characteristics:
Characteristics:
Most allow government to
have a command role in
areas that safeguard the
people and the market itself.
Most mixed economies
follow traditions that have
been so ingrained that they
may not even be aware of it.

Characteristics:
Characteristics:
The global economy is
primarily free-market based.
There is very little
government control,
although some regulations
and agreements have been
put into place.

Bibliography:
Camba, Aileen L., Maniego, Norie L., Ronan,
Jose R., Payumo, Casiana Salud.,
Understanding Economics
Gabay, Bon Kristoffer G., Remotin, Roberto M.
Jr., Uy, Edgar Allan M., Economics: Its
Concepts & Principles (with Agrarian Reform
& Taxation) 2007
Tullao, Tereso S. Jr., Understanding
Economics in the Philippine Setting, Phoenix
Publishing House 2002

next is.
Economic Goals
Goals
Economic