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Economic Systems
SECTION 1: Types of Economic Systems
SECTION 2: Features of the U.S. Economy
SECTION 3: The U.S. Economy at Work
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SECTION 1
Types of Economic Systems
Objectives:
How are the three basic economic questions
answered in traditional, command, and
market economies?
What are the roles of self-interest and
incentives in a market economy?
What types of mixed economies exist today?
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SECTION 1
Types of Economic Systems
How the three basic economic questions
are answered in various economies:
Traditional economy
what to produce determined by tradition
how to produce determined by custom
for whom to produce determined by the number of
members in the society
Command economy—answers to all questions
determined by government officials
Market economy—answers to all questions
determined by individuals
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SECTION 1
Types of Economic Systems
Roles of self-interest and incentives in
a market economy:
Self-interest drives people to fulfill their
needs and wants and helps the market grow.
Incentives help people decide which
economic choices are in their self-interest.
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SECTION 1
Types of Economic Systems
Types of mixed economies currently
in existence:
authoritarian socialism
capitalism
democratic socialism
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SECTION 2
Features of the U.S. Economy
Objectives:
What are the basic principles of free
enterprise in the United States?
What are the two markets of the circular-
flow model?
How does the circular-flow model reflect
exchange?
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SECTION 2
Features of the U.S. Economy
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SECTION 2
Features of the U.S. Economy
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SECTION 3
The U.S. Economy at Work
Objectives:
How do nations decide how to use scarce
resources?
What are the major goals of U.S. economic
policy?
Why do economic goals sometimes conflict?
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SECTION 3
The U.S. Economy at Work
How nations decide how to use scarce
resources:
Households, businesses, and the government
work together to set goals.
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SECTION 3
The U.S. Economy at Work
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CHAPTER 2
Wrap-Up
1. How does the U.S. economic system compare to
traditional and command economic systems?
2. In which category of mixed economic systems does
the U.S. fit? Explain your answer.
3. Give an example of a traditional economic system.
What are the consequences to an individual
consumer who enters into a contract?
4. What are the economic principles of private
property and voluntary exchange?
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CHAPTER 2
Wrap-Up
5. What are the goals of U.S. economic policy?
6. Why are scarcity and choice basic economic
problems?
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