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COMPARATIVE
ECONOMIC SYSTEMS
Economic System
An economic system is the method used
by a society to produce and distribute
goods and services.
COPY ALL
Traditional Economy
1. Allocation of resources is based on
rituals, habits, or customs
2. Roles are defined by family
3. People work together for the common
good
4. Little individual choice
Mixed Economy
1. Individuals and businesses as decision
makers for the private sector
2. Government as decision maker for the
public sector.
3. A greater government role than in a free
market econom
4. Most common economic system today
Examples: England, Germany,
Russia
Command Economy
1. Central ownership of property/resource
2. Centrally planned economy
3. Lack of consumer choice
Example: Cuba and Former Soviet Union
Economic Systems
Pure
Comma
nd
Pure
Market
Mixed Economy
c
i
m
o
n
s
tem
United
Kingdom
79%
Germany
Russia
51%
71%
100
Pure
Comma
Pure
Market
Mixed Economy
c
i
m
o
n
s
tem
Canada
81%
Cuba
28%
Brazil
57%
100
Pure
Comma
Pure
Market
Mixed Economy
Australia
83%
c
i
m
o
n
s
tem
100
Pure
Comma
Pure
Market
Mixed Economy
Features Command
Economy
1. Government regulation of some
business practices
Wages, labor hours,
safety practice.
Continuum of Economic
Systems
Command
Economy
Communism
On the far left
Socialism
Left of center
but right of
communism
Market
Economy
Capitalism
On the far
right
Capitalism
An economic system characterized by
private ownership of businesses and
marketplace competition
The government is concerned about its
people and takes care of those who cannot
care for themselves
The political system is a democracy with
leaders elected by the people
The United States and Japan
Socialism
Increased government involvement in
peoples lives and the economy
The main goal is to keep prices low for all
people and to provide employment for
many
The government runs key industries and
makes economic decisions
More social services for all and free or low
cost medical care
Canada, Germany, Sweden,
Communism
The government runs everything
(Totalitarian government)
Only one political party, the Communist
party, runs the government
All people able to work are assigned jobs
there is virtually no unemployment
The government assigns housing, schools,
and occupations
There is little to no economic freedom
Cuba, North Korea, and China are examples
Principles of
Islamic economic
system
Wealth is a test
Anam 165/Nahal 71
Zumr 49
And Allah has made some of you excel others in wealth. (Nahal 71)
levels,
When
a man
in trouble
cries for
help of165)
Allah, and when he is
what
is gets
given
to he
you.
(Araf
granted favors, he says I have got it due to my knowledge. In fact
wealth is a trial but most of people do not know. (Zumr 49)
Mission of Islam ()
Prayer