Question

different types of economic systems
how a country answers the three basic economic questions depends on the economic system it uses to produce and distribute goods and services. in general, they use different types of economic systems.
the three types of economic systems are traditional, market, and command. each type of economic system answers the questions of what to produce, how to produce, and for whom to produce in a different way.
1 traditional economy
this system answers economic questions based on traditional customs and values passed down from generation to generation.
2 market economy
this system answers economic questions based on supply and demand in the market. what the people want to buy and sell determines what goods and services are produced.
3 command economy
this system answers economic questions through strict governmental control and regulations.
reading for information
use what you learned to circle the correct answers.

1. a countrys economic system refers to

a. whether it is led by a president or a prime minister
b. the way in which it produces and distributes goods and services
c. the availability of productive resources to make goods and services
d. whether or not citizens are allowed to participate in the government process

1. what are the three economic questions that every countrys economy must answer?

a. how to produce, when to produce, and why to produce?
b. what to produce, how to produce, and for whom to produce?
c. what is the price, what is the cost, and what is the opportunity cost?

1. in a traditional economy, decisions about what, how, and for whom to produce are determined by

a. the government b. cultural traditions c. supply and demand

1. in a command economy, decisions about what, how, and for whom to produce are determined by:

a. the government b. cultural traditions c. supply and demand

1. in a market economy, decisions about what, how, and for whom to produce are determined by:

a. the government b. cultural traditions c. supply and demand

Explanation:

1. The definition of an economic system is about production and distribution of goods/services.
2. Standard economic questions are what, how, for whom.
3. Traditional economy - based on cultural traditions.
4. Command economy - government control.
5. Market economy - supply and demand.

Answer:

1. b. the way in which it produces and distributes goods and services
2. b. What to produce, how to produce, and for whom to produce?
3. b. cultural traditions
4. a. the government
5. c. supply and demand