Types of Economic Systems

Research and Define these 4 major economic systems.

Traditional Economies: An economic system in which economic decisions are made based on customs, beliefs, religion and habits. TRADITIONAL ECONOMIES USE THE RESOURCES THAT THEY HAVE AVAILABLE TO THEM TO PRODUCE THE NECESSITIES OF LIFE. Traditional economies existed in earlier ages and in some industrialized nations today.

Centrally Planned (Command) Economy: is an economic system in which the state or government controls the factors of production and makes all decisions about their use and about the distribution of income. He planners decide what should be produced and direct enterprises to produce those goods. Important planned economies that existed in the past include the Economy of the Soviet Union, which was for a time the world's second-largest economy.

Market Economy:is an economic system in which the production and distribution of goods and services takes place through the mechanism of free markets guided by a free price system rather than by the state in a planned economy. In a market economy businesses and consumers decide what they will produce and purchase, as opposed to a planned economy where the government decides what is to be produced and in what quantities.

Mixed Economy:is an economy that has a mix of economic systems. It is usually defined as an economy that contains both private-owned and state-owned enterprises or that combines elements of capitalism and socialism, or a mix or market economy and command economy. This economy includes a degree of private economic freedom that mixes in centralized economic planning.

Communism: a theory advocating elimination of private property,a system in which goods are owned in common and are available to all as needed.

Socialism:refers to a broad array of doctrines or political movements that envisage a socio-economic system in which property and the distribution of wealth are subject to social control.