Getting Organized.docx - Getting Organized Command Market and Mixed Economies Not all economies are organized in the same way The three major ways they

Getting Organized.docx - Getting Organized Command Market...

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Getting Organized: Command, Market, and Mixed Economies. Not all economies are organized in the same way. The three major ways they can be organized are as a market economy, a command economy, or a mixed economy. In a market economy, consumers and businesses decide what they want to produce and purchase in the marketplace. They make these decisions by “voting with their dollars.” Producers decide what to produce given the demand they see in the marketplace in terms of their sales and the prices they get for their goods and services. In a pure market economy, also known as a laissez-faire economy (from the French “allow to do”), the government plays a very limited role in what is produced. The government does not direct, and may even lack the power to direct, the private sector to produce certain goods and services. In a command economy, also known as a planned economy, the government largely determines what is produced and in what amounts. It directs producers to make and deliver goods and services in specified amounts. In practice, command economies are associated
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