Definitions

Traditional Economy- when all choices are made by people who lived a long time ago.

Command Economy- when all choices are made by the government.

Market Economy- choices are made on how prices change in stores.

Mixed Economy- when a place has more than one economy

Economy- how much money and things a place has

Traditional Economy

In a traditional economy all choices are made by people who lived a long time ago and what they did back then is what they do now. They made the same things their mom's and dad's made. They make these for anybody who needs them. In this economy people trade things to get what they want. For example if you wanted a cookie you could give someone something of yours so that they would give you a cookie.

I will trade you this bread for that chicken

Command Economy

In a command economy the government makes all the choices. This means that the government gets to choose what to make, how to make it, and who to give it to. This economy is not working.

I work in the government. All choices are made by me.