Describe the three types of economic system and list at least five features of three economic systems.
Answers
conomists generally recognize three distinct types of economic system. These are 1) command economies; 2) market economies and 3) traditional economies.
features of command economy
1.The government is in control of the pricing of goods and services.
2.The government makes all decisions for finances in the country, such as hourly rate of pay for workers. The government may even assign people the jobs.
3.Since hourly rate of pay is regulated, also tending to be just enough to survive, people will tend to try and break the rules, such as sell stuff on the black market to make more money.
4.The state has absolute power over all resources.
5.The command economy has state-owned entities as well as privately-owned entities that are controlled by the state.
6.People in power, such as politicians, give orders to buyers, sellers, and investors.
features of market economy
1.No governmental intervention: In market economy, government is facilitator not doer. ...
2.Market led: The economy is led by market. ...
3.Consumer's sovereignty: In market economy, consumers are sovereign. ...
4.Personal freedom and motives: ...
5.Personal property: ...
6.Perfect competition:
features of traditional economy
1.Traditional economies are often based on one or a few of agriculture, hunting, fishing, and gathering.
2.Barter and trade is often used in place of money.
3.There is rarely a surplus produced. In other words, most of the goods and services are fully used.
4.Often, people in a traditional economy live in families or tribes.
5.Societies may follow herds of animals in order to hunt and sustain those in the traditional economy.
6.Many people progress from hunters to farmers where they can place permanent structures and start a society.
Explanation:
There are three main types of economies: free market, command, and mixed. The chart below compares free-market and command economies; mixed economies are a combination of the two. Individuals and businesses make their own economic decisions. The state's central government makes all of the country's economic decisions.