Section 5 KL Term Definition Pros Cons Traditional Economy Decision making by

Section 5 kl term definition pros cons traditional

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Section 5: KL Term Definition Pros Cons
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Traditional Economy Decision making by custom The production and distribution of food, clothing, and shelter is woven into the fabric of society. Economic activities do not need to be coordinated or regulated in any way by the government. Tradition and community values serve to keep the economy running smoothly The standard of living of most people in traditional economies is very low. Families do not earn enough to do more than meet their most basic needs. They have only limited access to goods such as cars or services like medical care. Market Economy Decision making by individuals Its efficiency at meeting people's' needs: When demand for a product rises, its price in the market goes up. This signals businesses to produce more. Instability: Periods of growth and prosperity in market economies usually alternate with recessions, or slow- downs, in business and employment. Unequal distribution of wealth: The market divides wealth to people according to how society values what they do. Command Economy Decision making my government planners Central planners can ensure full employment by devising enough projects to absorb all members of the workforce. This ability, along with controls on prices, can bring stability to the economy. A command economy can also distribute income more equally than a market economy, because everyone shares in the nation's wealth. The performance of command economies has been disappointing because the government controls wages and prices, workers have little incentive to work hard or to produce high- quality goods, and In a command economy is that government planners, no matter how well intentioned, are less efficient at making economic decisions than the market is.
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  • Fall '16
  • Craig Zupi
  • Government, Economic system, Presidential system, Form of government, Forms of government

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