Fundamental Principles of Economies

Since we learned in the last module that we all face the problem of scarcity, how do we deal with that problem as a nation? Whether you are an individual consumer or a powerful nation, you must answer three basic economic questions:  What? How? Who?   Each nation places a different importance on economic efficiency, freedom, security, equity, and growth.  In this topic, you will learn about four different types of economic systems, advantages and disadvantages of each system, and how they answer the three basic economic questions.  After studying this topic, you will know:

• What are economic systems?
• What do all economic systems have in common?
• What are the major differences of these economic systems?

Essential Questions

• How does the government influence the answers to the basic economic questions: what does the nation produce, how does it produce, and how much does it produce?
• What are the roles of government in a market economy?