4 Economic Types

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Economic types

Economies are classified in 4 kinds:

1.Market economy (Free- market economy/ Capitalist market economy): All economic activities are decided by private sector although  it need public coordination. It means that all economic agents can do everything freely, but they have to respect public law and apply social responsibilities such as environmental and labor health, so on. A market economy is an economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's individual citizens and businesses. There is little government intervention or central planning. This is the opposite of a centrally planned economy, in which government decisions drive most aspects of a country's economic activity.

2.Command economy (Centrally- planned economy/ Planned economy): All economic activities are planned by public sector. It means that the government plans what to produce, how many to produce, who to provide or get, how much to sell and so on. The command economy is a key feature of any communist society. Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.

3.Mixed economy: An economic system are combined both market and command economies. A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.They are 2 kinds such as Market-Mixed economy and Command- Mixed economy.

4.Traditional economy: An economic system is basic. There are not using all currencies in economic process. It means that All economic agents have all businesses in form of bartering. Traditional economy is an economic system in which traditions, customs, and beliefs help shape the goods and services the economy produces, as well as the rules and manner of their distribution. Countries that use this type of economic system are often rural and farm-based. Also known as a subsistence economy, a traditional economy is defined by bartering and trading.

Thanks,
Mrs. Et Sopheak
Lecturer in Economics