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Economic Systems
Economic Systems
Economic Systems
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ECONOMIC SYSTEMS 2
Economic Systems
Introduction
Economic systems are the mechanisms through which society and governments trade
resources, services, and goods. Economic systems entails capital, labor, and resources (both
physical and non-physical), labor and capital. A community's economic structure is made up
organizations and consumption habits. The economic system is made up of all of these
Rosefielde's work, three fundamental economic systems are identified: market, planned, and
mixed. Pryor (2006), on the other hand, adds to the list a traditional economic systems.
Planned system
and services must be planned, according to the government. People are employed by the state
in communist nations. The government owns the majority of the businesses, if not all of
them. For instance, the government establishes who owns firms, who purchases and sells to
whom, and who makes the final business choices, including who works for them (Rosefielde,
2008). From invention to delivery, the government governs every facet of a product or
service.
According to Pryor (2006) only a few governments (such as North Korea and Cuba)
still maintain tightly regulated economy, implying that communism is a thing of the past.
Everything is well since the central authority acts in the public interest. It seems that this is
not the case. A government-run economy can only go so far in terms of reform. They are
sluggish to adapt because power is concentrated in a few hands. They are in jeopardy because
Market system
ECONOMIC SYSTEMS 3
consequence, the government has little sway. Here, the government's control over resources
and the economy is restricted. The rules of this ecosystem are determined by humans and a
mix of supply and demand. Ideas are the foundation of markets. That is, no pure market
system operates in this manner. Why? In all economic systems, the evidence points to central
government involvement in the economy. Most nations have anti-monopoly and fair trade
laws. A market economy, in principle, promotes fast growth (Rosefielde, 2008). There is a
possibility that growth and free markets are connected. One of the primary disadvantages of a
market economy is that individual firms, especially rich ones, have great power. It is unjust
Mixed system
consequence, "mixed systems" is referred to as "dual systems (Rosefielde, 2008)." The term
seen in some rich Western countries. While many businesses are privately owned, the
government owns a large number of others. Mixed systems are the norm, not the exception,
across the world. The market and command systems are combined in a hybrid system. Hybrid
economies, on the other hand, struggle to combine free markets with government supervision.
As presented by Zhao (2010) governments often go above and beyond their statutory
obligations.
Conclusion
Planned, market, and mixed economic systems are the three types of economic
systems (market). Traditional systems rely heavily on concepts and traditions. In a market
system, however, a single person cannot influence supply and demand dynamics. Hybrid
economies, on the other hand, mix command and market economies. The majority of
ECONOMIC SYSTEMS 4
countries, including the United States, have a combination of free market and planned
economies. In a hybrid system, there is a lot of disagreement over how much government
should do. Assuring that commercial or governmental institutions supply particular items and
References
Rosefielde, S. (2008). Comparative Economic Systems: Culture, Wealth, and Power in the
48(1), 77-77.
Zhao, S. (2010). The China Model: can it replace the Western model of modernization?