economic systems

WHAT IS AN ECONOMIC SYSTEM?: 

WHAT IS AN ECONOMIC SYSTEM? A way in which a nation uses its resources to satisfy its peoples needs and wants is known as economic system. There many kinds followed by different parts of the world till now .

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Types of Economic systems traditional economy Planned economy Market economy Mixed economy

Traditional economy: 

Traditional economy Traditional economy is a family or community based economic system that relies on custom and rituals to make its choices. For example The amazon tribes Aborigines Parts of S outh A merica

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The Amazon & the Aborigine's tribe

PLANNED ECONOMY: 

PLANNED ECONOMY Planned or command is a centrally controlled economy where the government takes all the decisions. Decisions regarding industry its production and distribution of goods and services

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Pros : -A sense of community within the economy -Income equality -Potential to get things done very quickly Cons : -Little innovation -No competition within the economy -Firms will have a hard time -The quality of the goods are detrimental -Inefficient allocation of resources -Lack of Freedom -Lack of personal gain Examples: - Saudi Arabia - China - Vietnam

MARKET ECONOMY: 

MARKET ECONOMY A market economy is a system in which economic decisions and the pricing of goods and services are guided solely by the consumers and businesses and there is little government intervention or central planning. These decisions are based on free price.

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Pro - less regulation leads to more efficient allocation of resources & more value for the money involved Con - less regulation may lead to social costs like environmental damage, offshoring to inhumane work conditions Examples: Brazil, Japan, USA, Sweden, Colombia, Sudan, Burkina Faso, Papua New Guinea, and Bhutan

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MARKET ECONOMY In market economy all the decisions are taken up by the private companies and individually Example: Japan PLANNED ECONOMY Whereas in planned economy the government takes all the decisions for the industries and the people Example : Saudi A rabia

MIXED ECONOMY: 

MIXED ECONOMY Mixed economy is one in which there is a mixture of free enterprise and government control. Most of the developed countries of the world have a mixed economy.

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Pros: -Equal state in privately owned resources -Private owners cannot exploit people -Private owners have to take care of their own costs -Sectors such as defense will be in safe hands ( govt ) -Government will run non-profit organizations such as post offices cons: -Duplication of resources. eg private and public both have busses running on the same route -Harmful products such as cigarettes being made -Government can be corrupted by private people influencing them Examples: Canada, Australia, Japan, Germany, the United Kingdom, Italy

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Therefore I conclude saying that mixed economy is a better economic system than the planned and government areas as there a balance of both the systems CONCLUSION