What is the economic system?

Very many people prefer not to delve intoproblems of the state, do not pay attention to global environmental problems and in general have no idea how their livelihoods are reflected in the country's economic system. Let's analyze in this article some rather important concepts, namely: what kind of economic system, types of economic system, and what is the economic system. So, a set of elements that are linked together, and form an economic structure, is called an economic system. The economic structure is divided into four types:

1. traditional,
2. market,
3. command,
4. mixed.

Traditional economic system

Considering what a traditionaleconomic system, we can not but note the fact that it is built on natural production, and has a bias towards agriculture. Traditional economy honors tradition and worships its unspoken laws.

In our time, almost never usetraditional economy. You can find only a few countries that lead a traditional way of life, for example, tribes living in Africa. Their way of life has not changed much. They live according to the same traditions and laws as their ancestors. But in some countries, people still celebrate religious holidays, such as Christmas. By the way, the observance of traditions is very visible on the economy.

Command economic system

Let's consider in this section what iscommand economic system. Planned or command economy is characterized by the fact that it makes a decision on how, what, when and for whom to produce. Based on the statistics of the country's data, there is a demand for services and goods. As for the production crisis, in the conditions of the command economy it is practically impossible. But there may be a shortage of quality services and goods.

The advantages of the command economy can be attributed tosaving resources, human. The planned economy is able to react quite quickly to all kinds of threats. Remember how quickly the Soviet Union evacuated all the factories to a safe area. The market economy will not be able to do this.

Market Economic System

In order to make it easier to understand the question of whether,that such a market economic system, you can compare it with the command. Unlike the command economy, in the market economy, private property dominates, in the basis of supply and demand. And, accordingly, free pricing is welcomed. The role of the state in the economic system is limited by regulation through laws.

For a long time it was thought thatInterfering with the market economy is quite harmful, and the market is able to regulate all emerging problems independently. However, this claim was contested. From the crisis, you can only get out if there is a demand for services and goods. But it could appear only from the side of the state.

Mixed economic system

If to understand, it becomes clear that alreadythere are practically no countries in which you were a market or traditional, or a command economy. In each country there are some elements of a market or traditional economy. In important industries there are remnants of the traditional economic system. Almost all consumers belong to private companies. They determine the demand only for their products, and see new trends. But there is a certain type of goods that can be produced only in the traditional economy. For example, national costumes, and some products. That is why the elements of the traditional economy have been preserved.