this is a summary of the economic sectors and their characteristics and responsibilities in our economy. it is of great use for last minute studying. it is easy to understand. best of luck
- Global economy – a means of sharing resources amongst people of the
whole world no matter their origin
Planned economy
- An economic system in which the government makes decisions on what,
how and for whom to produce for its citizens. [ communism and
socialism]
Origin
- During the self sufficient phase community leaders would decide and
plan on how resources would be put to use
- It collapsed after world war two during the great depression when
countries decided to trade with each other. Countries that have this
system are regarded as undeveloped or underdeveloped
Contribution toward global economy
- Do not contribute to globalisation as prices are determined by the
government whereas in the global economy prices are determined by
the interaction of demand and supply
Market economy
- An economic system wherein all economic problems are resolved by the
interaction of demand and supply
Origin
- A group of economic philosophers decided that the interference of the
government in production and consumption/ distribution of goods and
services prevents the economy from improving
Contribution towards global economy
- Capitalism strongly supports the global economy as goods and
servicescan be traded all over the world without government restrictions
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