Introduction to Economic Systems Note Taker
Name:
Block:
(TEKS: 10A, B) ANSWERS ON PAGE TWO BELOW
There are three basic economic systems used by countries. Economic systems usually reflect the cultural beliefs of
the population and its form of government. As we read about the different systems, consider the examples we
mapped for Forms of Government and predict which system they most likely use.
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

Free Enterprise (or Market Economy). Private individuals decide what is produced and how
much to charge. It is driven by the idea of supply and demand (Rare or highly desired items cost
more, plentiful or unwanted items cost less).
o Countries:
Socialist (or Mixed Economy). The government operates basic services and industries such as
TV, transportation, power, medical care, etc.
o Countries:
Communism (or Command Economy). The government makes nearly all the economic
decisions…what, how much, and prices.
o Countries:
But there is more to the story. Most countries don’t easily fit into these categories, but land in the spectrum between
a total free or totally controlled economy.
Classify the following countries along the spectrum below. Lightly shade the spectrum from red (communism) to
green (free enterprise). Write the name of the countries where you believe they best fit on the spectrum. Include at
least: China, Iran, Mexico, North Korea, Saudi Arabia, United Kingdom (UK) and the United States (US). An
example is included.
Economic Spectrum
Communist (Command)
Mixed
Free Enterprise
Sweden
Let’s check our work at http://www.heritage.org/Index/ranking
Can you infer if there is a relationship between forms of government and economic systems? Explain (using two
examples):
KEY:
•
Free Enterprise (or Market Economy). Private individuals decide what is produced and how
much to charge. It is driven by the idea of supply and demand (Rare or highly desired items cost more,
plentiful or unwanted items cost less).
o
Countries: US, UK
•
Socialist (or Mixed Economy). The government operates basic services and industries such as
TV, transportation, power, medical care, etc.
o
Countries: Sweden, Mexico, Saudi Arabia
•
Communism (or Command Economy). The government makes nearly all the economic
decisions…what, how much, and prices.
o
Countries: China, Iran, North Korea
Communist (Command)
Mixed
Free Enterprise
Iran
United States
China
Sweden
United Kingdom
Unlimited Governments
Limited Governments
North Korea
Saudi Arabia
Mexico
Can you infer if there is a relationship between forms of government and economic systems? Explain
(using two examples):
The freer the people, the freer the economy. Examples:
US has limited government and a (mostly) free economy.
North Korea has a very restrictive unlimited government
which completely controls the economy.