Introduction
An economic system is a way of determining how to use 1_______ to satisfy people’s wants and needs.
Three Basic Questions
A nation must determine what 2 ________ to produce and how to produce them. The 3 _________ a nation has determines for whom goods and services will be produced. In the United States, most goods and services are distributed through a 4 _______.
Types of Economic Systems
The amount of involvement a society’s leaders have in allocating scarce 5_______ helps determine its economic system. In limited parts of the world, a 6 ________, based on customs and beliefs, exists. Government leaders control the factors of production and make all economic decisions in a 7 __________. In contrast, individuals in a 8 _________ economy, control economic decisions. Under this system, the economy is based on information obtained from the 9 ___________, where the voluntary exchange of 10 ___________ takes place. The last type of economic system combines the basic elements of the command and market economy. In a
11 __________ there is private ownership of property and individuals decisions are combined with government intervention..
Rendering the text:
1. Render the text into English in writing using the base-text for self-correction.
2. Get prepared to render the text orally.
Разные страны имеют разные экономические системы, определяющие то, как использовать свои ресурсы для удовлетворения потребностей населения. Однако все экономические системы должны ответить на одни и те же три вопроса: Что производить? Как производить? Для кого производить?
Экономисты выделяют четыре типа экономических систем: традиционную, командную, рыночную и смешанную. Они отличаются тем, как отвечают на три основных экономических вопроса. Однако в реальной жизни не существует «чистой» экономической системы. В определенной степени они все смешанные.
Традиционная экономика отвечает на все экономические вопросы, исходя из своих обычаев и традиций. В командной экономике все факторы производства контролируются правительством: оно принимает все решения в отношении их использования. Рыночная экономика характеризуется частной собственностью на ресурсы. Она использует систему рынков и цен для управления экономической деятельностью. Смешанная экономика объединяет черты командной и рыночной.
Answering WHY questions: Speak up your mind.
1. Why must nations consider trade-offs when deciding what to produce?
2. Why does an economic system have to decide for whom to produce?
3. Why might people’s material well-being rarely improve in a traditional economy?
4. Why can’t businesses or nations produce as much as they want?
5. Why might a market economy be described as the “opposite” of a command economy?
6. Why don’t “pure economic systems” exist?
7. In a mixed economy, why might the government have to regulate businesses in order to protect the environment?
Reviewing: Watch video “Types of Economic Systems”. Have you learnt anything new? Be ready to answer the following questions:
1. Can there be a market economy without government involvement?
2. How is a mixed economy defined?
3. What kind of balance does a mixed economy try to find?
Exploring issues: Socialism can be defined as an economic system that stresses government ownership of the major factors of production and control of the distribution of goods.
Study the list of characteristics and tick the ones that could concern pure socialism:
• Most prices are set by the state, rather than by forces of demand and supply.
• The movement of resources, particular labor, is strictly controlled. The central planning authority makes all decisions.
• The government lets people and businesses make their own economic decisions without government interference.
• Most of the major factors of production are owned by the state. Private property rights are strictly limited to small tools that an individual needs for an occupation.
• People living and working in these economies rarely experience an increasing level of material well-being.
• Individual risk taking is not allowed. The state takes all of the risk when it decides which new companies shall be formed.
• Economic decisions about what, how and for whom to produce are all made by the state officials through central planning agencies.
• Taxation is often used to redistribute income.
• The government places certain legal restrictions on freedom of enterprise.
Summarizing: Summarize what you’ve learned so far about economic systems. Note that all economic systems are based on the model below. The model shows how an economic system must make decisions based on the concept of scarcity. Each society’s system must make economic choices by answering the three key economic system questions while making the best use of limited resources
Interpreting cartoons: Study the cartoon and answer the questions:
1. Is the king complaining or boasting of something?
2. Can a completely new economic system emerge as a result of “investing” in it?
3. What can “instructions” mean in this case?
