9-12 Benchmark IV-B: 1, 2, 3, 8, 14
NCEE: 3, 4, 7, 16
2 classes of 45 minutes each
Broad Social Goals |
Command Economies |
Market Economies |
| Economic Efficiency | Decisions of resource usage made by the planning bureau in pursuit of goals set by central government |
Decisions of what is most valued are made by consumers; profit incentives motivate suppliers to respond to these consumer choices at the lowest possible cost |
| Economic Equity | The planning bureau sets wage rates and creates jobs as part of the total economic plan; resulting income among those who have jobs are more equal than in a market economy |
Individuals are free to choose their occupation or to not be employed; income depends upon the value created in the workplace; wage rates vary according to supply and demand and the dispersion in wages can produce more inequality than in a Command Economy |
| Economic Freedom | Individuals are free to choose but the range of choice is limited because ultimately what gets produced and what jobs are created are determined by the central planning process |
Individuals are free to choose their occupation or to not be employed, and how they spend their income, and the range of choice is larger because it is not limited by central planning decision; suppliers are free to supply as they desire in the pursuit of profit |
| Economic Security | Government provides and often guarantees jobs, health care, pensions though the levels may be low |
Government in most developed market economies provides varying levels of safety net programs to include health care, retirement benefits, schooling, unemployment compensation, disability, low-income family assistance |
| Economic Growth | The central political authority sets growth rate targets and because these are mandated and written into economic plans, are often achieved, as was true in the Soviet Union and in China; often these high growth rates are targeted to certain industries which means that other industries are deprived on resources |
Individuals in pursuit of higher living standards and greater profits provide the core process by which growth takes place; government can encourage or discourage economic growth in choosing policies that promote or discourage increases in productivity and technological advancement |
| Economic Stability | Typically, protracted periods of unemployment and inflation are absent because the central planning authority rules out these cyclical changes in their economic plans; some industries can, however, be neglected and often fall into stages of long-term recession |
When consumers are free to choose, changes in their purchases can set off cyclical changes (up or down); counter-cyclical monetary and fiscal policies have been adopted by government. |