Econ Systems

Vocab Activity Sheet

Economic Systems - a means by which societies or governments organize and distribute available resources, services, and goods across a geographic region or country.  There are three major economic systems: Capitalism, Socialism, and Communism.

Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state (government).  Often times called a market economy because it  a system based on private ownership, free trade, and competition

Communism - an economic and political system in which a country's trade and industry are controlled by the state (government) and everything is owned by the community.  Often times called a command system or command economy because it involves central government planning. 

Socialism - a political and economic theory of social organization where the means of production, distribution, and exchange should be owned or regulated by the government.  Often times called a mixed system because is contains a mixture of free market system and command system.

Three Questions Answered by Economic Systems -  In order to meet the needs of its people, every society must answer three basic economic questions: What should we produce? How should we produce it? For whom should we produce it?

gross domestic product (GDP) - the value of all goods and services produced within a country in a single year.

developed countries - countries with strong economies and high quality of life.

developing countries - countries with less productive economies and a lower quality of life.