Types of Economies | Assignment

Running head: TYPES OF ECONOMIES
TYPES OF ECONOMIES
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TYPES OF ECONOMIES
1
Introduction
Each economy has its own resources and its way of operation. Every economy in the
world is unique and different from each other based on its economic and market structure.
Economies are not similar, although they share some common characteristics. Economies are
broadly identified into four types which are given below.
Types of economies
Traditional economic system
This is the most traditional form of market structure where goods are produced as per the
traditional belief of the people. Generating economic surplus is rare societies under such forms
are close knit.
Command economic system
In this system, a greater portion of the economy is governed by a centralized power and
focus more on resources like oil. The government is actively involved in planning and
redistribution process. The government owns most of the critical industries like aviation, railroad
and aviation, although government has the power to create jobs for the people.
Market economy or capitalist system
The production of goods and services are dependent on the demand and supply forces of
the general market and does not have a central planning. It has been said that the movement of
goods and services are based on invisible hand such that market forces of demand and supply
automatically adjusts itself towards the equilibrium state (Trainer, 2016). The market is free from