Characteristics of Economic systems

Sort the characteristics based on what economic system it best describes. You will use these characteristics to compare and contrast differing economic systems of: Communist and Free Market. Click on each characteristic and match it to the type of system it describes (drop down menu of options when you click). Command Economy (Communist) Limited to no individual freedom or choice – the government makes most, if not all decisions Central authority or government makes almost all major decisions for the people Limited private property rights – government owns homes, businesses, resources not the people Examples: North Korea, former Soviet Union Government only allows communication services provided and controlled by them – no private sources of media Change direction – government can quickly gather resources on a large scale, easy to change production Corruption often occurs– government leaders provide for themselves at expense of general population No profits = individuals don’t get profits (total tax), all goes to the government so no motivation or incentive to work hard or create new things (limited innovation) Government leaders are threatened by market ideas that give people and businesses more power Market Economy (Capitalism) Variety– firms encouraged to make products to meet consumer wants (profits), a lot of competition in order to gain customer satisfaction (and $) Economic Freedom – consumers buy what they want, businesses make what they want, individuals make decisions for themselves – limited government interference Risky business – high degree of uncertainty could be successful OR fail and lose everything Adjust gradually over time – businesses respond to what society wants, society responds to changes in markets Examples: Australia, Canada, Great Britain, Japan, Singapore, South Korea, U.S. Private ownership and profits – since we own the businesses, we earn the profits – but can create gaps in wealth (some have a lot and some have very little) Very few or no public goods provided – government does not provide goods for everyone, you must have money