Alex! I could hear you thinking about the economy. Lucky for you I know all about the economy. oooo
The 2nd is Command. Command is where the people rely on the government to make all the decisions. The 3rd is Mixed. Mixed is when there is a balance between peoples choices and the governments
There are four different types of economic systems. The first is Market. Market is driven by the consumers and individuals decide on what they need.
The 4th one is Traditional. Traditional is based on cultures and rituals. It focuses on the community as a whole
oh so the new IPhone is a want but food and clothes are a need
A want is something that you do not need to live. A need is something that you do need to live. After paying for all your needs, if you have money left over you can use that to buy something you want
Everyone has wants and needs. Companies products are based on those wants or a needs.
Alex was at the amusement park on sunny day and while she was on the ride she was thinking about what the economy is. Suddenly a ghost appeared and told her all about it.
So if a product is cheap the price will be lower and they will have a lower supply of it but the more expensive it gets the demand goes down and they will have more supply of it
Supply and demand is pretty interesting. Companies will put the demand for a product and the supply of it on a graph and see where the lines intersect and that is how the decide the price for the object.
Alex was terrified but decided to ask about the economy anyways. The ghost proceeded to tell her about the different types of economic systems
The economy rises then falls and keeps repeating itself. When the economy is at its peak it will have to fall eventually.
After peak comes the recession. When the economy starts to fall but not completely. Then comes the trough. This is when economy is at its lowest point.
This lead into a conversation about peoples wants and needs
Thank you ghost for teaching me all about econonmy
It was a pleasure being to the one to teach you. Now I'm off to go haunt some people
After a long talk about wants and needs, the ghost started to tell Alex about supply and demand.
Alex and the ghost move onto business cycles. She explains how what goes up must come down applies to business cycle
But then the economy recovers and will hit its peak again!
The ghost and Alex say goodbye and she vanishes into thin air.