Economics
Kelsea Shick Economics
October 5, 2010
An economic system consists of production, distribution/consumption of goods and services of an economy (Grolier). Without any of the above an economy would not become as industrialized and successful as either the United States or have the worldwide trade system Saudi Arabia maintains today.
The basic economy is composed of its national factors, whether or not it’s a free market economy, command economy or traditional economy. A free market economy is an economy in which there is no economic intervention and regulation by the state, except to enforce private contracts and the ownership of property. For example the government will only come into effect around the needs of the people; when buying or selling homes, wages, money and the rights of individuals. Command economies like China, and the former Soviet Union are part of the economic system where the economy is controlled by a central administration. Today this economic system can be viewed as communism and collectivism. The main advantage to this type of economy is the government’s ability to change rapidly, unlike the free market economy where the in-dependency of the consumers enables them to control the supply and demand factor. The oldest economy acknowledged worldwide is the traditional economy. This economy is based around a groups or colonies agriculture, inheritance and custom. This style of living can be found in small businesses’/family, religions and beliefs in lifestyles like the Amish community and small towns. One advantage to this type of economy is that it obtains a strong social network, along with specific methods and tools. Traditional based economies have no direct leader, unlike
October 5, 2010
An economic system consists of production, distribution/consumption of goods and services of an economy (Grolier). Without any of the above an economy would not become as industrialized and successful as either the United States or have the worldwide trade system Saudi Arabia maintains today.
The basic economy is composed of its national factors, whether or not it’s a free market economy, command economy or traditional economy. A free market economy is an economy in which there is no economic intervention and regulation by the state, except to enforce private contracts and the ownership of property. For example the government will only come into effect around the needs of the people; when buying or selling homes, wages, money and the rights of individuals. Command economies like China, and the former Soviet Union are part of the economic system where the economy is controlled by a central administration. Today this economic system can be viewed as communism and collectivism. The main advantage to this type of economy is the government’s ability to change rapidly, unlike the free market economy where the in-dependency of the consumers enables them to control the supply and demand factor. The oldest economy acknowledged worldwide is the traditional economy. This economy is based around a groups or colonies agriculture, inheritance and custom. This style of living can be found in small businesses’/family, religions and beliefs in lifestyles like the Amish community and small towns. One advantage to this type of economy is that it obtains a strong social network, along with specific methods and tools. Traditional based economies have no direct leader, unlike