Economics Systems Terms
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9 Terms
Model Market economy
An economic model is a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested.
Traditional economy
An economic system that relies on history, culture, and traditions to run its economy.
Market economy
An economic system that relies on the principles of supply and demand to direct production and distribution of goods in the economy.
Command economy
An economic system that relies on the government to direct the economy.
Mixed economy
an economy organized with some free-market elements and some socialist elements
Capitalism
An economic system in which individuals are in control of the economy with little to no government interference.
Types of Mixed Economies
Ones with elements of Capitalism, Communism, and democratic socialism.
Communism
An economic system in which the government controls the economy.
Democratic socialism
A socialist economy in which the means of production are socially and collectively owned or controlled alongside a democratic political system of government.