This book will mainly use the term 02 030 053 emc

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Unformatted text preview: nterprise is called capitalism or a market economy. This book will mainly use the term 02 (030-053) EMC Chap 02 11/17/05 4:13 PM Page 33 Pick any two of the scenes shown here and write a sentence about the key economic question: What goods will be produced? Repeat this process for each of the other two questions every economic system must answer: How will the goods be produced? and For whom will they be produced? free enterprise, but occasionally it will speak of a capitalist economic system or a market economy. Som is sometimes loosely referred to as a command economy. To be more accurate, a command economy is a particular type of sot economic system. QUESTION: I thought there were more than two economic systems. For example, isn’t communism an economic system? ANSWER: Yes, communism is sometimes considered an economic system. So why are we talking essentially about two economic systems instead of three, four, or five? Essentially, all other systems are variations within one of the two major systems. Here is an analogy. Think of all people in the world: people with red hair, black hair, blue eyes, green eyes, brown eyes, people who are tall, people who are thin, and so on. If we were to ask how many different types of people in the world, one answer would be “many,” but another way of looking at things says that people come in only two types, men and women. Instead of talking about all the various minor modifications in economic systems (for example, some with slightly more government control than others), we choose to talk about the two major, and distinctly different, economic systems: free enterprise and som. Communism, then, would go in the “som” category, in that it is a type of som, because it is a system with extensive government control over economic matters. Major Differences Between Free Enterprise and Som Let’s look at the major differences between free enterprise and som in a few areas. Resources Resources are used to produce goods and services. In a free enterprise economic system, these resources are owned and controlled by private individuals. In a sot economic system, the government controls and may own many of the resources. For example, in the former Soviet Union, the central government owned many of the resources in the country. Today, in North Korea, the government owns almost all the resources in the country. Section 1 Economic Systems 33 02 (030-053) EMC Chap 02 11/17/05 4:13 PM Do People Around the World Work the Same Number of Hours? ?????????????????? W orkers in different countries don’t always work the same number of hours a year. For example, the following table shows the average hours worked by a worker in three countries in 2003. Country Hours worked Australia Japan United States 1,814 1,801 1,792 In contrast, here are the average hours worked by a worker in three other countries. Country Hours worked Sweden France Norway 1,564 1,453 1,337 It is also the case that the percentage of the workforce that works more than 40...
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