Explain various types of economy and economic system
Answers
Explanation:
An economic system is a mechanism with the help of which the government’s plan and allocate accessible services, resources, and commodities across the country. Economic systems manage elements of production, combining wealth, labour, physical resources, and business people. An economic system incorporates many companies, agencies, objects, models, as well as for deciding procedures.
Types of Economic System
Capitalist Economy- In a capitalist system, the products manufactured are divided among people not according to what people want but on the foundation of Purchasing Power—which is the ability to buy products and services. Which means an individual needs to have the money with him to buy the goods and services. The Low-cost housing for the underprivileged is much required but will not include as demand in the market because the needy do not have the buying power to back the demand. Therefore, the commodity will not be manufactured and provided as per market forces.
Socialist Economy- This economy system acknowledges the three inquiries in a different way. In a socialist society, the government determines what products are to be manufactured in accordance with the requirements of society. It is believed that the government understands what is appropriate for the citizen of the country, therefore, the passions of individual buyers are not given much attention. The government concludes how products are to be created and how the product should be disposed of. In principle, sharing under socialism is assumed to be based on what an individual need and not what they can buy. A socialist system does not have a separate estate because everything is controlled by the government.
Mixed Economic – Mixed systems have characteristics of both the command and market economic systems. For this purpose, the mixed economic systems are also called as dual economic systems. However, there is no sincere method to determine a mixed system. Sometimes, the word represents a market system beneath the strict administrative control in certain sections of the economy.
Economic Sector
The economic sector is divided into three economic sectors
Primary Sector: It is that sector which relies on the environment for any production or manufacturing. Few examples of the primary sector are mining, farming, agriculture, fishing, etc.
Secondary Sector: In this sector, the raw material is transferred to a valuable product. Few examples are construction industries and Manufacturing of Steel, etc.
Tertiary Sector: It is also known as Service Sector, and includes production and exchange of services. Few examples are banking, insurance, transportation, communication, etc.
Meaning of Economic System
An economic system is a mechanism with the help of which the government’s plan and allocate
accessible services, resources, and commodities across the country. Economic systems manage
elements of production, combining wealth, labour, physical resources, and business people. An
economic system incorporates many companies, agencies, objects, models, as well as for
deciding procedures.
Types of Economic System
Capitalist Economy- In a capitalist system, the products manufactured are divided among people
not according to what people want but on the foundation of Purchasing Power—which is the
ability to buy products and services. Which means an individual needs to have the money with
him to buy the goods and services. The Low-cost housing for the underprivileged is much
required but will not include as demand in the market because the needy do not have the buying
power to back the demand. Therefore, the commodity will not be manufactured and provided as per market forces.
Socialist Economy- This economy system acknowledges the three inquiries in a different way. In a
socialist society, the government determines what products are to be manufactured in
accordance with the requirements of society. It is believed that the government understands what
is appropriate for the citizen of the country, therefore, the passions of individual buyers are not
given much attention. The government concludes how products are to be created and how the
product should be disposed of. In principle, sharing under socialism is assumed to be based on
what an individual need and not what they can buy. A socialist system does not have a separate
estate because everything is controlled by the government.
Mixed Economic – Mixed systems have characteristics of both the command and market
economic systems. For this purpose, the mixed economic systems are also called as dual
economic systems. However, there is no sincere method to determine a mixed system
. Sometimes, the word represents a market system beneath the strict administrative control in
certain sections of the economy.
Economic Sector
The economic sector is divided into three economic sectors
Primary Sector: It is that sector which relies on the environment for any production or
manufacturing. Few examples of the primary sector are mining, farming, agriculture, fishing, etc.
Secondary Sector: In this sector, the raw material is transferred to a valuable product. Few
examples are construction industries and Manufacturing of Steel, etc.
Tertiary Sector: It is also known as Service Sector, and includes production and exchange of
services. Few examples are banking, insurance, transportation, communication, etc.