Types of Economy- Mobile Classroom.docx

 Traditional EconomyDefinition: An economy based on tradition passed down from one generation to the next. Basically: Whatever the parents did, the children will do also. Most times, this is a primitive type of economy based on farming.Example: An African tribe in Malawi has been farming in the same style for hundreds of generations. They plant and gather the same types of crops in the same way as their parents for hundreds of years. Advantages: This has kept multiple generations of Malawians alive and they are experts at raising their crops.Disadvantages: Children are not allowed to seek different jobs or move to cities. There is very little freedom to be an mand EconomyDefinition: An economy controlled by the government. Citizens of a country are forced to work whatever jobs the government tells them to and the profit belongs mostly to the government.Example: Communist countries force their citizens to take civil examinations that determine their intelligence and skills. Then, the citizens are forced to work whatever jobs the government tells them they must. Advantages: Everyone has a job and everyone gets a share of the profit. Ideally, no one starves.Disadvantages: Individuality is prohibited. Citizens have no choice in their jobs. Oftentimes, the rich class ends up ruling and the poor get poorer.Market EconomyDefinition: An economy created by supply and demand. Prices are determined by how much an item is wanted and how many items are created. Producers make whatever amount is needed. Consumers buy what they need and want.Example: Ethiopia has the world’s largest open-air market. When you go to buy something, the price may change depending on how much you offer. There is no set price and you can negotiate with the distributor.Advantages: The prices can be lowered and become more affordable. People have choices. Individuality is promoted.Disadvantages: There is no protection from businesses becoming too large and taking advantage of the consumers.Mixed EconomyDefinition: An economy with both elements of a market and a command economy. People can sell their own goods based on supply and demand, but the government sets certain rules and regulations.Example: The United States is a mixed economy. Business owners can choose what type of business they’d like. And prices are determined by how much of something exists and how much it is wanted (supply/demand). However, the government imposes taxes and makes laws against big business harming consumers.Advantages: Individuality is promoted and citizens are protected against high prices and low wages.Disadvantages: It depends on how mixed it is. Sometimes, big businesses run the governmental laws. ................
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