Introduction
Economic systems are organized way in which a state or nation allocates its resources and apportions goods and services in the national community. An economic system is slackly defined as country’s plan for its services, goods produced, and the exact way in which its economic plan is carried out. There are three types of economic systems exist, they are command economy, market economy, and mixed economy. Command economy is also sometimes called planned economy. The expectations of this type of economy is that all major decisions that related to the construction or production, distribution, commodity and service prices are all made by the government. However, in market economy, national and state governments play a slight role. The assumption of the market plays a major role in deciding the right path for a country’s economic development. Mixed economy combines elements of both the command and market economies in one interrelated system. Certain features from both market and command economic systems are taken to form this type of economy.
The market system is clearly the most effective economic system
A market economy may therefore also be known as a free market economy. It is a type of economic system in which the trading and exchange of goods, services and information takes place. The phrase is normally applied to countries or management regions that follow this approach. It functions primarily depending upon the forces of the market, namely demand and supply. Every commodity allocates and distributes based on the principle of “price”. Generally, price of a commodity shoots up when its demand exceeds supply and when the reverse occurs.
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Since markets are governed by the law...
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...eir own markets for products, and that they are not in control of the taxes they pay is one of the problems. Merchants will often complain of tax rates being too high for the services provided. The old communist regimes of Eastern Europe were centrally command economies, and yet commanding was not total. Other examples, Malaysia and China are using mixed economy.
All in all, the statement shows that market economy is clearly the most important effective economic system because of the freedom for making decisions. Furthermore, some of the countries that are using totally command economy are moving towards mixed economy and the countries that are using mixed economy are step towards market economy.
Bibliography
1. Sloman, John Economics.
2. http://www.economywatch.com
3. http://en.wikibooks.org/wiki/Main_Page
4. http://www.dict.cn
economic life ought to be carried out by a country's government. These notions may not
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