Types of Economic Systems
- [Technical University of Munich]
- Overview
The type of economic system depends on how scarce resources are distributed within the economy. The four types of economic systems are: traditional economy, market economy, command economy, and mixed economy.
Here are some examples of economic systems:
- Planned economy: Government makes all economic decisions regarding the production, distribution, and consumption of goods and services.
- Traditional economy: Resources are distributed through inheritance or cultural leadership.
- Mixed economy: Both the state and the private sector guide the economy. A mixed economy has the characteristics of both a market economy and a planned economy.
- Capitalism: Capitalism, also known as the private enterprise system, is based on market competition.
- Socialism: A centrally planned economic system with some degree of state or social control over production. In the extreme form of socialism, the government controls the production and price of goods and services.
[More to come ...]
