Type of economic systems

• Market economic systems are based on the concept of free markets with very little government interference. Regulation comes from the people and the relationship between supply and demand
• Traditional economic system lacks the potential to generate a surplus
• Traditional economic system


  • Commonly found in rural settings in second and third world nations
  • Predominantly farming or other traditional income-generating activities
• Economic systems regulate

  The factors of production, including land, capital, labor, and physical resources
• Command economies are rigid, react slowly to change, and are vulnerable to economic crises or emergencies due to centralized power
• Economic system encompasses

  Many institutions, agencies, entities, decision-making processes, and patterns of consumption that comprise the economic structure of a given community
• An economic system is a means by which societies or governments organize and distribute available resources, services, and goods across a geographic region or country
• The traditional economic system is based on goods, services, and work, all of which follow certain established trends. It relies a lot on people, and there is very little division of labor or specialization. It is very basic and the most ancient of the four types
• In a command system, there is a dominant centralized authority, usually the government, that controls a significant portion of the economic structure. Also known as a planned system, it is common in communist societies
• Mixed systems combine the characteristics of market and command economic systems. They are also known as dual systems and are the norm globally
• Traditional economic system is highly sustainable and has very little wastage compared to other systems
• Market economic system facilitates substantial growth, but allows private entities to amass economic power, leading to inequitable distribution of resources
• Types of Economic Systems

  • Traditional economies
  • Command economies
  • Mixed economies
  • Market economies
• Economic System

  A means by which governments organize and distribute available resources, services, and goods across a geographic region or country
• Market systems

  Under the control of forces of demand and supply
• Traditional systems


  Focus on the basics of goods, services, and work, influenced by traditions and beliefs
• Composition of industries in a mixed system

  • Most industries are private
  • The rest, composed primarily of public services, are under the control of the government
• Economic systems are grouped into traditional, command, market, and mixed systems
• Governments tend to exert much more control than is necessary in mixed economies
• Many countries in the developed western hemisphere follow a mixed system
• Mixed economies face the challenge of finding the right balance between free markets and government control
• Mixed systems are the norm globally
• Mixed economies

  Combination of command and market systems
• Mixed systems combine the best features of market and command systems
• Command systems

  Centralized authority influences