ECONOMIC SYSTEMS

Free market economy

Self interest

Prices and markets

Limited government involvement

Private property

All resources are only available at prevailing price

Competition eliminated by monopolies

Could result in irresponsible behaviour by firms, i.e pollution

Private wealth may be maximised at the expense of others

Command Economy

Central economic planning

Concerntration of power in a Ruling party

Socially equitable distribution of national income

Social ownership of land and capital

Services such as health and education are provided by the government

People have greater security and social solidarity

Lack of individual freedom and choice

Decision making is centralised

Economic initiative may be suppressed due to lack of profits motive