TYPES AND FEATURES OF ECONOMIC SYSTEMS. Describe different economic systems (free enterprise, centrally planned and mixed economy) and how they solve their economic problems.
(ii) Distinguish among the systems.
DEFINITION OF ECONOMIC SYSTEM
An economic system may be defined as an arrangement specifying how production and consumption are controlled in a society.
It also means an organized way by which the means of production in a state are utilized in order to satisfy human wants.
In other words, an economic system refers to the way in which the available productive resources in a state or nation are owned, managed or utilized for the satisfaction of human wants.
the basic economic problems of the society are discussed. Such basic problems include what to produce, how to produce, for whom to produce, etc.
The type of economic system practiced in any society or nation depends on the way the available productive resources are owned and the way society takes decisions on issues relating to the basic economic problems.
In other words, it is the ownership of the means of production (whether private or public), how the choice is made and by whom that determines the type of economic system.
The world is divided into three major groups capitalism or free market economy, socializing and the mixed economy.