Chapter 4 , Section 3
Economic and Political Systems
• What is an economic system?
• How do governments differ in their
structure?
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Chapter 4 , Section 3
Types of Economic Systems
Capitalism
Socialism
Communism
• Most basic and nonbasic businesses are
privately owned.
• Workers produce the
goods and services.
• A company earns
profits on its products
and decides what to
charge and how much
to pay workers.
• The consumer is
important.
• free-market economy
• The government owns
most basic industries.
• It runs them for the
good of society, not
for profit.
• The government
decides what to pay
workers and what to
charge for goods.
• Non-basic industries
follow the capitalist
model.
• Nations: Spain, Italy
• The central
government owns all
property for the
benefit of its citizens.
• It controls all aspects
of citizens’ lives,
including prices of
goods and services,
how much is
produced, and what
workers are paid.
• Nations include:
Cuba, China, and
North Korea
Chapter 4 , Section 3
Economic and Political Systems
Chapter 4 , Section 3
Economic and Political Systems
Describe the three main types of economic
systems.
capitalism, socialism and communism
Which form of government gives power to make
decisions to the greatest number of people: a
monarchy, a democracy, or a dictatorship?
A democracy gives the most power to the people to
make decisions about their government.