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

Economic system overview

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 practised 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 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.

Types Of Economic Systems

There are four main types of economic systems:

  1. Traditional economy: This is an economic system that relies on customs, traditions, and beliefs to make economic decisions. In a traditional economy, people tend to produce and consume goods and services that have been handed down from generation to generation. Examples of traditional economies can be found in rural and tribal communities.
  2. Command economy: Also known as a planned economy, this system is characterized by government ownership and control of resources and means of production. The government decides what goods and services are produced, how much is produced, and how they are distributed. Examples of command economies include Cuba and North Korea.
  3. Market economy: This is an economic system in which production, distribution, and prices are determined by the market forces of

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.

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  1. of demand curve and used
  2. advertising industry
  3. factors of production
  4. entrepreneur
  5. joint stock company
  6. public enterprises
  7. private enterprises
  8. limited liability companies