Types of Economic Systems .

Running head: TYPES OF ECONOMIC SYSTEMS
Type of economic systems
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TYPES OF ECONOMIC SYSTEMS
Different types of economy
The system which comprises of the mechanism for production, distribution along with
exchange for products apart from the consumption of the goods and services in the various
entities are termed as an economic system. There are mainly four types of economic systems.
An economic system can also be termed as an organized way through which a country can
allocate its resource and also distributes goods and services throughout the whole nation.
Economic systems can also be termed as the means through which the governments of the
county will be allocating resources and trade goods and services (Becker, 2017). The
government controls the five factors of production which includes capital, labor, physical
sources, entrepreneurs and the information resource. Therefore, an economic system can be
termed as a system of production, allocation of resource along with the distribution of good
within a society or within a given area. All the economic systems generally comprise of three
basic questions which includes
 What goods are to be produced and in what quantities?
 How will the goods and the services will be produced and by whom along with what
resources and technologies should be used?
 Who receives the output of the production? Who will be enjoying the benefits of the
goods and services and then how will the products be distributed to the society?
The study of the economic systems therefore states the relationship present between
the agencies and the institutions.
There are basically four different types of economies. They are traditional economy,
command economy, mixed economy and market economy.

TYPES OF ECONOMIC SYSTEMS
Traditional economies:
The traditional economic system is known to be one of the most important ancient
types of economies which is resent in the world. It has been found that huge portion of the
world still functions under the traditional economic systems. The traditional economic
systems is mainly known to be present in rural, closely tied up land and in second or third
world countries. Presence of surplus is quite a rare phenomena in this type of economic
system. One of the advantage of this type of economy is that the tradition and the custom are
preserved which is not present in the mixed economies (Ghisellini, Cialani & Ulgiati, 2016).
The members in this economy also have a more specific and pronounced role and also these
economies are socially satisfied. However one of the disadvantage is that the economies
cannot enjoy western medicine, technology and centralized utilizes. The traditional economic
system is generally most traditional and ancient type of economy. Traditional economies
cannot achieve the type of surplus or profit which results from the market or mixed economy.
It generally focuses on the goods and services which are directly related to the beliefs,
traditions and customs. The traditional economic system generally focuses on the customs
and history. The traditional economy usually exists in a nomadic society. The traditional
economy usually covers vast areas in order to find enough food for supporting them. Most of
the traditional economies also only produce what they need. Therefore, there is hardly any
surplus or leftovers. When these type of economies trade they usually relies on the barter. It is
present only between groups which do not compete.
Command economic system
In case of the command economic system, thee major part of the economic system
will be controlled by the government or the centralized power. As the government is one of
the main feature of the economy, it will be present in everything which comprises of planning