Business:
Economic systems:
An economic system refers to the way in which a country
runs its economy.
The factors of production: Remuneration
Natural resources rent
Labour wages
Capital interest
Entrepreneurship profit
Economies are made up of three participants (people making
joined economic decisions)
1: Households
2: Businesses
3: Government or the state
There are three types of economic systems:
1: planned economy
Where the government plans and manages all economic
activities. (north korea, cuba and china)
They decide:
what will be produced
How much and how it will be produced
For whom it will be produced for.
, The government achieves this by looking at the four factors
of production:
Land: all owned by government
Capital: controlled by government
Labour: the government is the only employer
Entrepreneurship: government acts as the entrepreneur
advantages Disadvantages
Everyone gets equal help No competition between
and everything they need businesses
Its steady and safe Government slow to adapt
to change
Health, schools & transport People don’t work had as
are important to the there are no rewards
government
The government makes People get little say
sure peoples basic needs
are met
The government plans and
runs businesses
2: The market economy
Production takes place to satisfy the needs and wants of the
community and to make a profit.
Production is based on supply and demand
Examples: Singapore, Australia, new Zealand
Economic systems:
An economic system refers to the way in which a country
runs its economy.
The factors of production: Remuneration
Natural resources rent
Labour wages
Capital interest
Entrepreneurship profit
Economies are made up of three participants (people making
joined economic decisions)
1: Households
2: Businesses
3: Government or the state
There are three types of economic systems:
1: planned economy
Where the government plans and manages all economic
activities. (north korea, cuba and china)
They decide:
what will be produced
How much and how it will be produced
For whom it will be produced for.
, The government achieves this by looking at the four factors
of production:
Land: all owned by government
Capital: controlled by government
Labour: the government is the only employer
Entrepreneurship: government acts as the entrepreneur
advantages Disadvantages
Everyone gets equal help No competition between
and everything they need businesses
Its steady and safe Government slow to adapt
to change
Health, schools & transport People don’t work had as
are important to the there are no rewards
government
The government makes People get little say
sure peoples basic needs
are met
The government plans and
runs businesses
2: The market economy
Production takes place to satisfy the needs and wants of the
community and to make a profit.
Production is based on supply and demand
Examples: Singapore, Australia, new Zealand
