| A | B |
|---|
| Traditional economy | In a society with this type of economy, the use of scarce resources and nearly all economic activity stems from ritual, habit, or custom. |
| The main advantage of a traditional economy | Evreyone knows which role to play and little uncertainty exists over what to produce. |
| disadvantages of a traditional economy | It discourages new ideas and new ways of doing things.This lack of progress leads to economic stagnation and a lower standard of living than other economic systems. |
| stagnation | A lack of movement or progress. |
| socialism | An economic and political system in which the government owns some but not all of the factors of production |
| economic systems | An organized way a society provides for the wants and needs of its people. |
| Command economy | Economic system characterized by a central authority that makes most of the major economic decisions. |
| Examples of command economies | North Korea, Cuba, the former Soviet Union |
| Advantages of a command economy | 1)It can change direction drastically in a relatively short period of time 2) It allows most citizens to receive goods and services they would not otherwise be able to afford. 3) |
| Disadvantages of command economies | 1) Leaders provide for themselves at the expense of the general population 2) The loss of individual freedom to choose 3) State controlled media such as radio and tv is usually limited to propaganda. 4) The production of low quality goods 6) Command economy requires a large decisio making bureaucracy6) All workers paid the same regardless of wha their job is or how hard they work. |
| Advantages of a market economy | 1) Individual freedom, adjusts gradually, little government interference, decentralized decision making, Variety of goods and services, high consumer satisfaction |
| disadvantages of a market economy | rewards only the productive, not enough public services, high degree of uncertainty |
