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The most important point I would like to convey to anyone reading this Padlet is that there are multiple different economic systems. You must first identify the answers to each of the 3 questions as they pertain to your situation as a society, if you are a strong agricultural nation or if you are a strong manufacturing nation, it is best to buy into your strengths and produce well enough to create a strong GDP.

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While researching information and sources for this Padlet I discovered the main differences between each of the economic systems and what goes into making the decision of which system a country will take on. This is based upon the result of the 3 main questions that every society faces when attempting to determine what to produce, how to produce it, and for whom it will be produced as well as distributed.

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The theory of trickle down economics is that all of the benefits that work for the wealthy, trickle down and benefit everyone else. These main benefits are tax cuts to businesses, high income earners, capital gains, and dividends. This theory only remains a theory because it is thought that cutting taxes for the wealthy does not benefit anyone but the wealthy.

This article is very informative and eye opening because it provides insight to the different ideas and theories that have been presented to explain why that trickle down economics remains a theory that is preached by more upper-class peoples and businesses because it provides tax breaks for them with the virtual promise that it will eventually benefit the lower and middle classes eventually, but eventually will not happen within this system.

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Trickle-Down Economic Theory

Trickle-down theory is more specific. It says targeted tax cuts work better than general ones. It advocates cuts to corporations, capital gains, and savings taxes. It doesn't promote across-the-board tax cuts. Instead, the tax cuts go to the wealthy.﻿﻿ The benefits trickle down to everyone else.

But Laffer warned that this effect works best when taxes are in the "Prohibitive Range." This range goes from a 100% tax rate down to an unspecified rate of around 50%.

If the tax rate falls below the Laffer Curve's prohibitive range, then further cuts won't stimulate economic growth enough to offset the lost revenue.

When Trickle-Down Policies Work

Reagan cut taxes significantly. The top tax rate fell from 70% for those earning $108,000 or more to 28% for anyone with an income of $18,500 or more. Reagan also cut the corporate tax rate from 46% to 40%.

Trickle-down economics was not the only reason﻿﻿ for the recovery, though. Reagan also increased government spending by 2.5% a year. He almost tripled the federal debt from $997 billion in 1981 to $2.85 trillion in 1989. Most of the spending went to defense. It supported Reagan's efforts to end the Cold War and bring down the Soviet Union.

Trickle-down economics, in its pure form, was never tested. It's just as likely that massive government spending ended the recession.

It appeared that the tax cuts worked. But, at the same time, the Federal Reserve lowered the fed funds rate. It fell from 6% to 1%. In this situation, it's unclear whether tax cuts or monetary policy caused the recovery.

Why Trickle-Down Economics Is Relevant Today

Republicans continue to use trickle-down economic theory to guide policy.

The Tax Policy Center found﻿﻿ that those earning in the top 1% would receive a larger tax cut percentage than those in lower-income levels. By 2027, those in the lowest 20% income levels would pay higher taxes.

Though Trump said it would boost growth enough to make up for the debt increase, the Joint Committee on Taxation reported﻿﻿ that the Act would add $1 trillion even after including the tax cut's impact on economic growth. It wouldn't spur growth enough to offset the cuts' loss in revenue.

Why Trickle-Down Economics Fails

Critics believe that the trickle-down policy has done damage﻿﻿ to the U.S. economy more times than it has helped. It has met with disastrous results when applied at the federal and state level.

Kansas﻿﻿ is a case in point. Business taxes were cut by almost a third, which left the state's income in the red. The benefits have gone to a handful of the wealthy, who did not invest much to spur the state's economic growth. Because the state's revenues are markedly decreased, Kansas' education budget has been significantly curtailed as well.

The International Monetary Fund also rejects the trickle-down theory.﻿﻿﻿ In its report authored by five economists, it argues that "...if the income share of the top 20% increases, then GDP growth actually declined over the medium term, suggesting that the benefits do not trickle down." The IMF's fight against income inequality revolves around the fact that expenditures of middle- to low-income sectors are the drivers of the economy. Even a mere 1% increase in wealth for 20% of low-income earners yields a 0.38% growth in gross domestic product. On the other hand, increasing the income of the top 20% high-income earners results in a negative 0.08% growth in GDP.

The Bottom Line

The trickle-down theory postulates that the benefits from tax cuts, capital gains, dividends, and even looser regulations on corporations and wealthy individuals would eventually flow down to benefit middle- to low- income earners. The extra wealth accruing from the deductions would drive the wealthy to invest in or expand businesses, boosting economic growth.

The Laffer Curve supports its effect but only up to the point where the tax rates are at a prohibitive range. Out of this range, trickle-down is deemed infeasible.

Trickle-down economics generally does not work because:

Cutting taxes for the wealthy often do not translate to increased rates of employment, consumer spending, and government revenues in the long-term.

Instead, cutting taxes for middle-and lower-income earners will drive the economy through the trickle-up phenomenon.

The added income for the wealthy, resulting from tax cuts, will simply increase the growing income inequality in the United States.

President Trump's Tax Cuts and Jobs Act is of current concern because this trickle-down policy is seen to exacerbate the income inequality already kicked into overdrive by Reaganomics.

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Trickle-down theory is more specific. It says targeted tax cuts work better than general ones. It advocates cuts to corporations, capital gains, and savings taxes. It doesn't promote across-the-board tax cuts. Instead, the tax cuts go to the wealthy.﻿﻿ The benefits trickle down to everyone else.

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This website starts by describing how there were attempts to indirectly answer these questions both with Plato and Aristotle but the questions were not articulate enough to have definitive answers. These questions and answers were not fully developed into their current form until around (1723-90) when economics were introduced as an discipline of study, most notably from the works of Adam Smith who published a five-book treatise called "An Inquiry into the Nature and Causes of the Wealth of Nations". With these three questions, it is which that a society is able to determine which economic system they will choose to utilize that fits them best.

I found this website to be helpful to provide historical insight to the creation and origin of the three economic questions, how they  can be answered to create the economic system for a society, and when they originally started to be though of by ancient Greek philosophers. I like how it provides different insights in the different economic systems that each society has the ability to choose from, as well as trends that have been relevant to different nations and how some nations have shifted their economic system based upon governmental control as well as resource output.

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What It Means

In order to meet the needs of its people, every society must answer three basic economic questions:

What should we produce?

How should we produce it?

For whom should we produce it?

A society (or country) might decide to produce candy or cars, computers or combat boots. The goods might be produced by unskilled workers in privately owned factories or by technical experts in government-funded laboratories. Once they are made, the goods might be given out for free to the poor or sold at high prices that only the rich can afford. The possibilities are endless.

Although every society answers the three basic economic questions differently, in doing so, each confronts the same fundamental problems: resource allocation and scarcity.

Resources are all of the ingredients needed for production, including physical materials (such as land, coal, or timber), labor (workers), technology (not just computers but, in a broader sense, all the technical ability and knowledge that is necessary to produce a given commodity), and capital (the machinery and tools of production). Scarcity refers to the essential fact that people's wants or desires are always going to be greater than the resources available to fulfill those wants.

Simply put, scarcity means that resources are limited. No country can produce everything, no matter how rich its mines, how massive its forests, or how advanced its technology. Because of the constraints of scarcity, then, decisions must be made about resource allocation (that is, how best to allocate, or distribute, resources for the maximum benefit of the society).

When Did It Begin

Questions of scarcity and resource allocation are as old as human civilization. Throughout history every society-whether society is defined as a nation, a tribe, or a single family-has had to determine what to produce, how, and for whom. While indirect attempts to answer these questions can be found in the writings of the ancient Greek philosophers Plato (c. 427-c. 347 bc ) and Aristotle (384-322 bc ), the questions were not articulated in their current form until economics was introduced as a discipline of study more than a thousand years later.

Modern economic theory as we know it today is founded on the writings of the Scottish philosopher Adam Smith (1723-90), especially his best-known work, a five-book treatise called An Inquiry into the Nature and Causes of the Wealth of Nations . Ever since this groundbreaking work was published in 1776, many competing economic theories have been presented, but all of them have been organized around the attempt to answer the three basic questions.

More Detailed Information

For every society the answers to the three basic questions depend on what kind of economic system it uses. The term economic system refers to the way in which a society organizes the production and distribution of good and services. The system that a society chooses reflects the philosophical and political ideas on which that society is founded. Historically, there have been three basic types of economic system: traditional, command, and market.

Traditional Economic System:

A traditional economy is rooted in long-standing cultural customs. Resources (especially land) are allocated through inheritance or by decisions of cultural leaders, and the new generation performs the same economic roles as their parents and grandparents before them. Traditional economies are founded on a strong philosophy of social interdependence and community. They usually revolve around subsistence farming, in which food is grown to feed the members of the community, not to sell or trade in markets. Although most traditional economies have been replaced by more modern economic systems, they can still be found in the agricultural areas of developing countries in Asia, Africa, and South America.

Command Economic System:

A command economy (also called a planned economy or centrally planned economy) is one in which economic decisions are controlled by a central authority, usually the state (government). The state controls the society's capital (means of production) and decides how resources should be allocated (including what should be produced, how prices should be set, and how much people should be paid for their work). Command economies go hand in hand with socialist or communist political philosophies, which emphasize the equal distribution of wealth but do not support individual entrepreneurship or the acquisition of private property. The Soviet Union was the most prominent planned economy of the twentieth century.

Market Economic System:

A market (also called capitalist) economy is one in which answers to the three basic questions are the cumulative result of many individual decisions about what to buy and what to sell in the public marketplace. Buyers express their preference for certain goods and services, thereby influencing what is produced. The means of production are privately owned by sellers, who try to produce things as cheaply and efficiently as possible in order to make a profit (meaning that they sell an item for more than it cost to produce). In its purest form a market economy should function without any government intervention. Market economies are founded on the idea that the good of the whole society depends upon freedom of choice, competition, and the right of every individual to pursue private wealth. The United States is the largest market economy in the world.

In reality, most countries employ some mix of economic systems. For example, although the United States identifies itself as a market economy, the government controls public education, the postal service, and a number of other enterprises that are integral to the functioning of the economy. The U.S. government also imposes various business regulations that supersede market forces, such as a minimum wage that all businesses must pay their workers, emissions standards that limit pollution, and excise taxes designed to offset the negative social impact of certain goods, such as cigarettes. Implicit in such regulations is the idea that freedom to profit (in a pure, unregulated market) is not the only measure of public good. In the United States there is constant debate about how much or how little the government should intervene in the market.

Recent Trends

In the 1980s most of the world's command economies began to embrace elements of the market system. In 1985, for example, President Mikhail Gorbachev (b. 1931) introduced in the Soviet Union an economic-reform program called perestroika (the Russian word for "restructuring"). The reforms led to economic upheaval, however, and the Soviet Union collapsed in 1991. Since then Russia and other former Soviet countries have continued to gravitate toward a market economic system, but the process has been fraught with difficulties.

In the late twentieth century the country that had transitioned most successfully from a command to a market economy was China. Beginning in the late 1970s, reforms in China were carried out as the government began to relinquish its control over the means of production and allow market forces to exert an increasing influence over the three basic economic questions: what gets produced, how it gets produced, and for whom it gets produced. Despite these changes, in the early years of the twenty-first century China still described itself as a "socialist market economy."

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for whom?what it meansin order to meet the needs of its people

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every society must answer three basic economic questions:

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Three Economic Questions: What, How, For Whom?

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Three Economic Questions: What, How, For Whom?What It MeansIn order to meet the needs of its people, every society must answer three basic economic questions: Source for information on Three Economic Questions: What, How, For Whom?: Everyday Finance: Economics, Personal Money Management, and Entrepreneurship dictionary.

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Outlined in this video, there are many different types of goods that are used for the economy and in the economy. In the example used in this video the presenter shows how an Ipad works as a capital good when being used to conduct business and can be classified as a business expense. The same Ipad can also be classified as a consumer good when purchased by a consumer for personal use.

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Types of Goods and the 3 Basic Economic Questions

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In this video the presenter is giving an update on Canada's growth as well as multiple issues such as the trade uncertainty with the USA being resoled with a new deal called  USMCA, or NAFTA 2. It is said to not be the best deal in the world yet it is positive and a step in the right direction about we fundamentally need when partnered with the USA. Another point that is made is that there was recently the announcement of a very large energy project in Kitimat, that will see around $40 billion invested in that part of the country, which should add about 0.2% growth in GDP in Canada.

I like this video because it is very informative about different issues and topics that matter in Canada, like trade and economic growth as well as the reality that yeas a trade deal had been made between the US and Canada but in no way is it the best made deal for anyone involved, there is still opportunity to improve so we can maximize the profits from the resources we produce.

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What’s driving Canada’s growth: Global Outlook, Q4 2018

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As outlined in this short video, the government is able to control and influence what is produced by owning and determining what goods and services will be produced for the public and how these will be priced and regulated. A prime example of this is the alcohol production within different countries, In Ontario we have the LCBO who is in-charge of the liquor and alcohol.

I like this video because even though it is short and only has a direct point about a command economy, it outlines what makes a command economy different from other economic systems when deciding on the three main questions because there is governmental guidance about what is going to be produced, how it is going to be produced, and where everything will be allocated to.

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How These Goods And Services Should Be Produced?

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Difference between Command and Market economies

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Difference between Command and Market economies

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In this video the visual comparison is made between the command economy and the market economy systems. The main differences between the two are Command economy is a more government controlled system that focuses on spreading produced resources equally out to the population. In a market economy it is more of a cost based system where when different things are produced the cost of the products are based upon the initial demand of the goods produced, when the demand of the goods decreases the price will usually decrease to improve the demand of what has been produced.

I enjoyed this video because it was a great visualization the differences between the two economic systems as well as other differences like in a command economy there is very rarely over production as goals and standards will be set by the government to ensure there is limited waste.

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Command and market economies | Basic economics concepts | AP Macroeconomics | Khan Academy

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In this graphic it outlines the core components that make up a traditional economy and what differentiates it from other economic systems. For example, in a traditional economy, trades are usually done by bartering and in production, they only produce what is needed and surpluses are very rare.

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A traditional economy is a system that relies on customs, history, and time-honored beliefs. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them. They use bartering instead of money.

Most traditional economies operate in emerging markets and developing countries. They are often in Africa, Asia, and South America. You can also find pockets of traditional economies scattered in developing countries throughout the world.

Economists and anthropologists believe all other economies got their start as traditional economies. Thus, they expect remaining traditional economies to evolve into market, command, or mixed economies over time. A market economy is a system where the laws of supply and demand direct the production of goods and services. A command economy is where a central government makes all economic decisions. Either the government or a collective owns the land and the means of production. A mixed economy combines the characteristics of the other three.

Key Takeaways

5 Characteristics of a Traditional Economy

The five characteristics of a traditional economy are:

1. Centering around a family or tribe

2. Existing in a hunter-gatherer and nomadic society

3. Producing only what it needs

4. Relying on a barter system

5. Evolving once it starts farming and settling

First, traditional economies center around a family or tribe. They use traditions gained from the elders' experiences to guide day-to-day life and economic decisions.

Second, a traditional economy exists in a hunter-gatherer and nomadic society. These societies cover vast areas to find enough food to support them. They follow the herds of animals that sustain them, migrating with the seasons. These nomadic hunter-gatherers compete with other groups for scarce natural resources. There is little need for trade since they all consume and produce the same things.

Third, most traditional economies produce only what they need. There is rarely surplus or leftovers. That makes it unnecessary to trade or create money.

Fourth, when traditional economies do trade, they rely on bartering. It can only occur between groups that don't compete. For example, a tribe that relies on hunting exchanges food with a group that relies on fishing. Because they just trade meat for fish, there is no need for cumbersome currency.

Lastly, traditional economies start to evolve once they start farming and settle down. They are more likely to have a surplus, such as a bumper crop, that they use for trade. When that happens, the groups create some form of money. That facilitates trading over long distances.

Traditional Mixed Economies

When traditional economies interact with market or command economies, things change. Cash takes on a more important role. It enables those in the traditional economy to buy better equipment. That makes their farming, hunting, or fishing more profitable. When that happens, they become a traditional mixed economy.

Traditional economies can have elements of capitalism, socialism, and communism. It depends on how they are set up. Agricultural societies that allow private ownership of farmland incorporate capitalism. Nomadic communities practice socialism when they distribute production to whoever contributed the most and earned it. That would be the case if the best hunter or the leader of the community received the best cut of meat or the best grains from a farmer. If an economy feeds children and the elderly first, it would be adopting communism and basing it on people's needs.

Pros and Cons of a Traditional Economy

Pros Explained

Little or no friction between members: Custom and tradition dictate the distribution of resources. As a result, there is little friction between members. Everyone knows their contribution toward production, whether it's as a farmer, hunter, or weaver.

Everyone understands their role and contribution: Members also understand what they are likely to receive. Even if they aren't satisfied, they don't rebel. They understand that it's what has kept society together and functioning for generations.

More sustainable than a technology-based economy: Since traditional economies are small, they aren't as destructive to the environment as developed economies. They don't have the capability to produce much beyond their needs. That makes them more sustainable than a technology-based economy.

Cons Explained

Exposed to changes in nature and weather patterns: Traditional economies are exposed to changes in nature, especially the weather. For this reason, traditional economies limit population growth. When the harvest or hunting is poor, people may starve.

Vulnerable to market or command economies that use up their natural resources: They are also vulnerable to market or command economies. Those societies often consume the natural resources traditional economies depend on or they wage war. For example, Russian oil development in Siberia has damaged streams and the tundra. That has reduced traditional fishing and reindeer herding for traditional economies in those areas.

Examples of a Traditional Economy

America had traditional economies before the immigration of Europeans. Nomadic Native American and indigenous economies had advantages, like communities of people with stronger immune systems. Small communities protected them from smallpox and other diseases from other countries and communities-but only for a while. Eventually, people from other countries immigrated and brought with them new diseases, as well as advanced weapons and more resources. Native Americans and indigenous communities could not fight off the diseases. These people who moved into their land also brought violent colonization and genocide to these communities.

Before the Civil War, the southern states in the U.S. had somewhat of a traditional economy. These states and their economies relied heavily on farming-much of which was done by enslaved people. When the war was over and slavery was abolished, these farms were forced to operate in new ways.

Another example is before the Great Depression when the United States had many aspects of a traditional economy. At the beginning of the 20th century, more than half of Americans lived in farming communities. Agriculture employed at least 41% of the workforce. But they used poor farming techniques to meet high demand following World War I. That resulted in droughts that ultimately led to the Dust Bowl. By 1930, only 21.5% of the workforce was in agriculture. It generated just 7.7% of the gross domestic product.

Haiti is another example. Haiti's economy is largely dependent on small family farms. It also uses wood fuel as a primary energy source. Unfortunately, many people live in poverty in Haiti and the nation's reliance on wood has also made it vulnerable to natural disasters, such as the earthquake that struck in 2010.

Indigenous tribes in the Arctic, North America, and eastern Russia also have a history of traditional economies. These communities rely on fishing and hunting. For example, the Sami people of Scandinavia manage reindeer herds. A tribe member's relationship to managing the herd defines their economic role. That includes their legal status, culture, and state policies toward the individual.

Frequently Asked Questions (FAQs)

Which countries have a traditional economy?

How are economic decisions made in a traditional economy?

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A traditional economy is a system that relies on customs, history, and time-honored beliefs. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them. They use bartering instead of money. Most traditional economies operate in emerging markets and developing countries.

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Canadian manufacturing throughout the decades

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Canadian manufacturing throughout the decades

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Starting in the 18th century Canada started producing grains int flours with the help of gristmills, built in New France and then put into Upper and Lower Canada, placing around 400 by 1840. Into the 19th century as the Canadian Pacific Railway was developed and new factories were developed, Canada started producing more lumber, grains, and animal products. In the 20th century as technology has advanced there has been an explosion in electronics development as well as Canada's telecommunications industry.

I found this website and information interesting because it gives a rough timeline of how Canada was able to develop as an economic nation based upon what they had to produce for domestic purposes as well as what they planned to export.

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Manufacturing is a critical component of Canada's economy. The production, sale and distribution of finished products contribute to consumer and labour markets, and secure Canada's position as an economic leader among developed nations. Major, medium-sized and small manufacturers produce goods used by Canadians and contribute to the revenue gained from the export of goods to other countries. Since the early 2000s, the manufacturing sector in Canada has declined significantly in response to changes in the global economy and fewer regulatory controls over Canadian products (see Free Trade; Globalization). The composition and structure of the Canadian manufacturing industry is transitioning in response to these changes, aiming to produce new goods that are in greater demand.

Description

The manufacturing industry produces a broad range of products for an equally broad range of uses. For example, manufacturing provides equipment for exploring, developing, extracting, processing and distributing resources from land, oceans and forests. Equipment for these purposes may include hydroelectric generators, fishing vessels, railway locomotives, farm machinery, mining equipment and machinery for transforming oil, natural gas and coal into chemicals, textiles and paints. Durable goods - including refrigerators, automobiles and telephones - are manufactured for such purposes as housing, transportation and communications. Manufactured edible goods include beverages, dairy products, processed vegetables and meat. Finally, manufacturing also includes machinery and equipment to package, handle, distribute, store and record all other manufactured goods.

Manufacturing is a major purchaser of raw materials and services. For example, steel is manufactured from iron ore, coal and other materials, which are mined and transported by railways, ships, trucks and conveyors (all manufactured goods). Executives, salespeople, engineers and others in the steel companies use all modes of transportation and types of accommodation, and purchase many services (e.g., data processing, communications, legal, accounting).

History

18th Century

Manufacturing in Canada began early in the 18th century with the introduction of gristmills to process grains into flour. The first gristmills were built in New France in the 17th century and, by 1840, there were 400 in Upper Canada and Lower Canada producing flour for domestic and foreign markets. Iron smelting began in the 1730s at the Forges St-Maurice near Trois-Rivières, Québec. By the mid-1740s, this foundry supplied some of New France's armament requirements as well as stoves and household utensils. The first steamboat made in Canada, the accommodation, was built in 1809 by the Eagle Foundry of Montréal, which made all of the more than 100 parts for its engines. The engines of the Royal William, which was, in 1833, the first ship to cross the Atlantic almost continuously under steam power, were manufactured by St Mary's Foundry in Montréal.

19th Century

Several events in the last half of the 19th century stimulated substantial growth in Canada's manufacturing industries. The first was Confederation in 1867. With political unification and self-government came geographic expansion, construction of the Canadian Pacific Railway, and new settlement bringing population increases, skills and capital. In 1871 a group of businessmen founded the Canadian Manufacturers' Association (CMA) dedicated to promoting the growth of manufacturing. Eight years later, John A. Macdonald's National Policy established protective tariffs to encourage domestic processing of Canadian materials. Newly established factories processing products for domestic consumption (such as lumber, grains and animal products) survived and prospered even during the economic depression of the late 1870s and early 1880s.The discovery of electricity and the subsequent harnessing of some of Canada's vast hydro resources provided industry with an efficient, low-cost source of electrical energy ( see hydroelectricity). At the same time, the extent of the mineral wealth beneath the Canadian Shield began to be realized, stimulating great interest in Canada's growth potential. The First World War stimulated industrial development and diversification, especially in such industries as steel, shipbuilding, nonferrous metals, and pulp and paper.

By 1920 manufacturing directly employed 600,000 workers, about 17 per cent of the total labour force at that time. The worldwide depression of the 1930s reduced economic activity and stifled industrial progress in Canada as in other countries, but Canadian industry expanded and diversified dramatically during the Second World War. There was swift growth in heavy industries (vehicles, aircraft, armaments, shipbuilding and steel) and spectacular development in aluminum, electrical apparatuses, communications equipment, tool making and chemicals. By the mid-1940s, manufacturing directly employed over one million workers, more than 25 per cent of the labour force.

20th Century

Throughout the 20th century, manufacturing contributed significantly to the economic well-being and prosperity of Canadians. Between 1945 and 1999, manufacturing accounted for a high of 24 per cent and a low of 15 per cent of Canada's total real output of goods and services, or Gross Domestic Product. By 1999, manufacturing accounted for approximately 19 per cent of Canada's Gross Domestic Product, and 1.9 million jobs. In this period Canada's manufacturing industry was strongly affected by computer technology, energy-price escalation and trade liberalization.

The first industrial computer was introduced in Canada in 1957. Since then, computer technology has found widespread use in manufacturing for tasks such as production, inventory control and accounting. The use of computer-aided design (CAD), computer-aided manufacturing (CAM) and robotics technologies has increased rapidly. Electronics spurred the explosive growth of Canada's telecommunications industry, which reached worldwide stature by the 1980s. Canadian manufacturers participated in the Aerospace industry by designing and producing communication satellites, and components for spacecraft and aircraft ( see Space Technology).

The rapid rise in world oil prices in the 1970s had a stimulating effect on the development of Canada's energy resources, particularly from bitumen in Alberta's oil sands region as well as from natural gas, coal seams, hydroelectric dams and uranium deposits. Demand increased for machinery and equipment used in exploring, developing and distributing these energy resources. Increased supply of energy permitted Canadian manufacturers to achieve internationally competitive scales of operation. Canadian-manufactured machinery and equipment have been used in energy development and production throughout the world.

In the second half of the 20th century, four key developments in trade policies and practices significantly affected Canadian manufacturers. They included: the Canada-US Automotive Products Agreement (or "Autopact"); the General Agreement on Tariffs and Trade (GATT); globalization of production; and multilateral Free Trade agreements reached with the US in late 1987 (Free Trade Agreement or FTA) and its expansion in 1994 to include Mexico (North American Free Trade Agreement or NAFTA). The 1965 Canada-US Automotive Products Agreement (known as the Autopact) between Canada and the US created a conditional, duty-free environment which has allowed the Canadian and US industries to rationalize according to appropriate economies of scale, resulting in efficient industries that serve an integrated Canada-US market. The Autopact benefited both countries at different times. Canada gained substantially more production, an increase in trade and productivity, a greater share of North American automotive employment and lower consumer prices.

Canada was one of 23 major trading nations that signed the original GATT treaty in 1947. GATT was a multilateral agreement signed by 85 nations and 30 provisional signees; its rules called for the elimination of discriminatory treatment in international commerce in order to maximize the use of world resources and thereby raise living standards. GATT membership was part of a national commitment to the principle of "freer trade," which over time increased the volume of manufactured goods to Canada. There have been nine rounds of GATT negotiations, the first in 1947 and the most recent in 2001 (the negotiations for which are still underway). The GATT was replaced in 1995 with the establishment of the World Trade Organization following negotiations conducted during the 1986 round of negotiations. The World Trade Organization assumed responsibility for the administration of multilateral trade agreements formerly conducted under GATT.

The state of international competition has changed drastically since the late 1950s and early 1960s. At that time, Europe and Japan were largely preoccupied with postwar rebuilding and with the development of internal markets. Canada's share of the world's exports of manufactured goods rose from 4.5 per cent to 6 per cent only to fall back to 4.5 per cent by the end of the 20th century. The emergence of Japan, Europe and China as global industrial powers has meant tougher competition for Canadian manufacturers. Competition has been increasingly based on cost of production per unit, placing downward pressure on wages and other costs associated with the production and transportation of manufactured goods. There has been intensified competition in the domestic and international markets in nearly all sectors, but particularly automobile production, machinery and electronics. Industrialization among lesser developed countries, due largely to the influence of foreign-direct investment associated with globalization, has focused on sectors producing labour-intensive, low-technology, highly-transportable goods. Increasing imports from lesser developed countries has created significant problems in Canada in such sectors as clothing, certain textiles, the lower range of the footwear market and consumer electrical products, as competition has become increasingly globalized.

21st Century

Economic and regulatory changes affecting Canadian manufacturing in the last quarter of the 20th century further intensified in the 21st century. By the 2000s, the manufacturing sector had declined significantly. Between 2004 and 2008, about one in seven (or 322,000) manufacturing jobs had disappeared. This trend is not unique to Canada: the majority of Organisation for Economic Co-operation and Development (OECD) member countries are experiencing a similar decline. Contributing factors include production moving to countries such as China, an aging population (leading to an increased demand for services over manufactured goods) and tariff reduction.

With the exception of the production of transportation equipment (excluding automobiles), oil and coal products, and computers and electronics, all other segments of manufacturing have experienced a downturn. The textile industry, historically one of the largest manufacturing employers in the country, is one of the hardest sectors hit. For example, between 2004 and 2011, jobs at textile mills decreased by over 60 per cent. The automotive sectors, as well as lumber and paper industries, are also in rapid decline, particularly after the 2008 recession.

In response to these changes, Canadian manufacturers are increasingly focused on production for domestic markets as globalized manufacturing and distribution networks undermine production for export. Central Canada continues to dominate the bulk of manufacturing output, with Ontario representing approximately 46 per cent and Québec approximately 24 per cent of total manufacturing sales. Many consumer goods industries are concentrated in these two provinces, which have well over half the country's population.​

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Manufacturing is a critical component of Canada's economy. The production, sale and distribution of finished products contribute to consumer and labour markets, and secure Canada's position as an economic leader among developed nations. Major, medium-sized and small manufacturers produce goods used by Canadians and contribute to the revenue gained from the export of goods to other countries.

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This website article about the mixed economy and its different characteristics as well as the pros and cons of it is very informative to differentiate it from a market, command and traditional economy. A mixed economy is a blend of all three of the other economic systems which benefits from the advantages of the 3 main categories while only suffering from a few disadvantages. These disadvantages could be related to too much freedom in the market which can leave less competitive members with less government support.

I found this website very informative about the mixed economic system as it is different yet similar to the market and command economies. I like that it gives different examples as of the advantages and disadvantages of this different system in comparison to others as well.

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A mixed economy is a system that combines characteristics of market, command, and traditional economies. It benefits from the advantages of all three while also experiencing some of the disadvantages.

Learn about how mixed economies work, examples of mixed economies, and the pros and cons.

Definition and Examples of Mixed Economies

A mixed economy combines the advantages and disadvantages of three different types of economies: market, command, and traditional economies. It's the most flexible system.

The United States Constitution guided America towards a mixed economy. The Fifth Amendment protects ownership of private property. It also limits government interference in business operations. That promotes the innovation that's a hallmark of a market economy.

At the same time, the Constitution encourages the government to promote general welfare. That creates the ability to use aspects of a command economy if it's for the overall good of the people.

The First Amendment protects the rights of groups to practice their religious beliefs. That allows communities, like the Amish in Pennsylvania, to retain their traditional economies.

Note

Most of the world's major economies are now mixed economies.

Globalization makes it difficult for command or traditional economies to avoid becoming a mixed economy. One reason is that most countries' leaders realize that their people are best served through international trade.

According to the theory of comparative advantage, a country prospers when it exports what it does best and imports what another country does best. That's why many countries import oil from Saudi Arabia, clothing from China, and tequila from Mexico.

Another reason is that the free market is the basis for the global economy. No single government controls it. World organizations have implemented some regulations and agreements, but there is no world government with the power to create a global command economy.

How Mixed Economies Work

To understand how mixed economies work, it's important to first understand how each of the three types of economies it combines-market, command, and traditional economies-works.

Characteristics of Market Economies

A market economy has six defining characteristics. The U.S. has all six characteristics of a market economy.

1. The law protects ownership of private property.

2. Everyone is free to live, work, produce, buy and sell whatever they choose (as long as it's legal).

3. Self-interest drives the buying and selling of goods and services, including employment. Sellers want the highest price, and buyers want the best value for their money.

4. The law protects competition.

5. Prices are allowed to float along with supply and demand.

6. The primary role of government is to make sure that everyone has free access to a free market. Congress passes regulations to make sure no one is manipulating the market. The First Amendment of the U.S. Constitution protects the free press. That ensures equal access to information for everyone.

Characteristics of Command Economies

Many aspects of the U.S. economy follow the characteristics of a command economy.

1. There is an annual federal budget that outlines the government's priorities and takes the place of a central plan.

2. Congress guides the allocation of resources. Taxes discourage some activities while subsidies encourage others.

3. Government spending follows the country's priorities. For example, U.S. military spending increased after the 9/11 attacks.

4. The government owns a monopoly in important national industries. These include NASA, the interstate highway system, and defense.

5. The federal government uses regulations to support economic priorities, such as agriculture.

Characteristics of Traditional Economies

The U.S. is moving further away from a traditional economy, but tradition still guides many economic policies.

A traditional economy relies on agriculture, hunting, and fishing. American traditions support the family farm. That has led to millions in agricultural subsidies. This is despite the predominance of a few global agribusinesses.

Laws and treaties also protect the fishing industry. Hunting is no longer needed as a primary source of food for most Americans, but tradition still supports it. Laws and permits protect the right to hunt.

Characteristics of Mixed Economies

A mixed economy has three of the following characteristics of a market economy. First, it protects private property. Second, it allows the free market and the laws of supply and demand to determine prices. Third, it is driven by the motivation of the self-interest of individuals.

Most mixed economies have some characteristics of a command economy in strategic areas. It allows the federal government to safeguard its people and its market. The government has a large role in the military, international trade, and national transportation.

The government's role in other areas depends on the priorities of the citizens. In some, the government creates a central plan that guides the economy. Other mixed economies allow the government to own key industries. These include aerospace, energy production, and even banking.

Most mixed economies retain characteristics of a traditional economy, but those traditions don't guide how the economy functions. The traditions are so ingrained that the people aren't even aware of them. For example, they still fund royal families. Others invest in hunting and fishing.

Advantages of a Mixed Economy

A mixed economy has the advantages of a market economy. First, it distributes goods and services to where they are most needed. It allows prices to measure supply and demand.

Second, it rewards the most efficient producers with the highest profit. That means customers get the best value for their dollar. Third, it encourages innovation to meet customer needs more creatively, cheaply, or efficiently.

Fourth, it automatically allocates capital to the most innovative and efficient producers. They, in turn, can invest the capital in more businesses like them.

A mixed economy also minimizes the disadvantages of a market economy. A market economy could neglect areas like defense, technology, and aerospace. A larger governmental role allows fast mobilization to these priority areas.

The expanded government role also makes sure less competitive members receive care. That overcomes one of the disadvantages of a pure market economy which only rewards those who are most competitive or innovative. Those who can't compete remain at risk.

Disadvantages of a Mixed Economy

A mixed economy can also take on all the disadvantages of the other types of economies. It just depends on which characteristics the mixed economy emphasizes.

For example, if the market has too much freedom, it can leave the less competitive members of society without any government support.

Central planning of government industries also creates problems. The defense industry could become a government-subsidized monopoly or oligarchy system. That could increase the country's debt, slowing down economic growth in the long run.

Successful businesses can lobby the government for more subsidies and tax breaks. The government could protect the free market so much that it doesn't regulate enough. For example, businesses that were too big to fail could be bailed out by the government if they started going bankrupt.

Key Takeaways

A mixed economy combines the advantages and disadvantages of three different types of economies: market, command, and traditional economies.

To understand how a mixed economy works, it's important to first understand each of the three types of economies it combines.

Most countries have a mixed economy these days as a result of globalization.

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A mixed economy is a system that combines characteristics of market, command, and traditional economies. It benefits from the advantages of all three while also experiencing some of the disadvantages. Learn about how mixed economies work, examples of mixed economies, and the pros and cons.

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The goal of this padlet is to help the reader understand the the importance and difference between these three questions and what role they play in the building of a society and its economy.

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The three economic questions that every society faces go as such.
What goods and services will be produced?
How will the goods and services be produced?
For whom are the goods and services produced?

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This picture provides a recent visual idea of the impact and amount that agriculture has on the Canadian economy. In this graphic it illustrates that 1 in 8 Canadian jobs was in the agricultural industry, accounting for more that 2.3 million people.

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This 2016 report provides an economic overview of the Canadian agriculture and agri-food system using the most recent data available.

The recently released report An Overview of the Canadian Agriculture and Agri-Food System 2016 describes the Canadian agriculture and agri-food system as "a complex, integrated and competitive supply chain with great importance to the Canadian economy. It is a dynamic and resilient system that constantly tries to adapt to changing consumer demands, technological advances and globalization. "

It is meant to be a multi-purpose reference that presents "a snapshot of the composition and performance of the agriculture and agri-food system as it evolves in response to challenges, opportunities and market developments ".

Highlights of the report (full version attached)

- In 2014, Canadians spent $195.7 billion on food, beverages and tobacco products. This represented the second-largest household expenditure category, after shelter.

- Real spending on food and non-alcoholic beverages increased by 2.2% in 2014, due in part to a slight increase in retail food price inflation in Canada.

- The agriculture and agri-food system generated $108.1 billion, accounting for 6.6% of Canada's 2014 GDP.

- In 2014, the agriculture and agri-food system provided one in eight jobs in Canada, employing over 2.3 million people.

- Expressed in dollar terms, government expenditures (federal and provincial) in support of the AAFS were estimated to be $5.3 billion in 2015-2016. As a share of the agriculture GDP, government expenditures are estimated to be 26.0% in 2015-2016. That figure was 25.9% in fiscal year 2014-2015.

- Canada was the world's fifth-largest exporter of agriculture and agri-food products after the European Union, the United States, Brazil and China in 2014.

- Canadian export sales grew by 12.0% over 2013 levels to $51.5 billion in 2014, increasing Canada's share of the total value of world agriculture and agri-food exports to 3.6%.

For more information, visit the Government of Canada website

May 9, 2016 - This 2016 report provides an economic overview of the Canadian agriculture and agri-food system using the most recent data available.

Public consultation on the next agricultural policy framework

Furthermore, the f ederal, provincial and territorial governments are currently working together to develop the next agricultural policy framework to launch April 1, 2018 ( They are currently elp them shape the direction of future policy and programs for the agriculture and agri-food sector. Formulate Growing Forward 2). asking the public to h your comments to the Government of Canada.

Download the full version of the report :

#Foodsecurecanada on Twitter

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Government of Canada - An Overview of the Canadian Agriculture and Agri-Food System 2016

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The report is one of Agriculture and Agri-Food Canada's measures of the strength of the agriculture sector and its contribution to Canada's economy. This forecast represents a federal-provincial consensus on the outlook for farm cash receipts, expenses and net incomes.

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A real life example of building a society and a nation's stability can look at any developing nation that is beginning to progress from a 3rd world country to a 2nd world country. When they begin to capitalize on production of their own resources such as precious metals and gems that are in demand from other countries, a nation is able to grow their economy and then decide which system that best suits the society.