Traditional economy 3
Command economy 4
Market economy 5
Mixed economy 6
An economic system is where goods and services are produced, consumed, and distributed. It is also the way resources (also known as factors of production) are controlled in a nation. Economic systems aims at solving the three economic activities which are: “what should be produced? How should it be produced? For whom should it be produced?” economic systems do not always work well, but they are often so vast and complicated that it is quite marvellous that they work at all. There are four main economic systems namely, the traditional system, command system, and the mixed economy. These economic systems are generally recognized by economists, but they do not completely agree on the question of which system best addresses the challenge of scarcity.
The traditional system
It is shaped by tradition. The work done by people, the goods and services they provide, how they use and exchange resources, all tend to follow long-established patterns. In traditional economy, interest of the community takes precedence over the individual. Individuals may be expected to combine their efforts and share equally in the proceeds of their labour.in other traditional economies, some sort of private property is restricted by a strong set of obligations that individuals owe their community (Shmoop Editorial Team, 2008).
The same goods are produced and distributed in the same way by each successive generation. Each participant’s method and task of production are prescribed by the custom. Economic system is not a priority in traditional economy. Usually, economic activity is secondary to religious and cultural values (Mohr ...
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