U. S. Government/Characteristics of Different Economic Types

Three basic questions of economics
 * What will be produced?
 * Who will produce it?
 * For whom will it be produced?

Each type of economy answers the three basic questions differently.

Traditional economy

 * Economic decisions are based on customs that have been going on for decades.
 * People often perform the same type of work as their ancestors did.

Free market economy

 * Private ownership of property/resources
 * Profit motive
 * Competition - Rivalry between producers/sellers; results in better quality and lower prices
 * Consumer sovereignty - Consumers determine through purchases what will be produced
 * Individual choice
 * Minimal government involvement in the economy

Command economy

 * Central ownership (usually by government) of property/resources
 * Centrally planned economy
 * Lack of consumer choice

Mixed economy

 * Individuals and businesses are owners and decision makers for the private sector.
 * Government is owner and decision maker for the public sector.
 * Government's role is greater than in a free market economy, but less than in a command economy.
 * Most ecomines today, including the US, are mixed economies.