TYPES OF ECONOMY

     The economy is the backbone of any country. The economy is the system that explains how people produce and consume goods and services. It also includes how people use decide about resources. It also determines how to describe talent resources. The production and distribution of goods and services together meet the needs of the people coming and working within the economy. It also determines that many types of work can be done using one resource. Which will reduce the cost of doing the work and give more profit. The five basic economic concepts are scarcity, supply and demand, cost and benefits, and incentives. The 3 basic fundamentals of economics are most important: Supply and demand, the value of money, and scarcity. Scarcity refers to a situation where an economy’s resources are limited and can not be accessed quickly.  

How does an economy work: 

     The Economy is a function of many factors, some of which are production, exchange, consumption, distribution, and taxes. An economy is a system that decides how resources are used to produce and consume goods and services. An economy is a system by which a society or government organizes and properly distributes the available resources and goods within a geographic area or country. Economic growth is often driven by consumer and business investment.

   

   The global system helps the global economy to function through international transactions that take place between the world's economies. Transactions in the global economy mainly involve trade between different countries.

      

   Types of economy: 

   The main types of economy are: traditional economies, command economies, market economies, and mixed economies.

Traditional economy : 

     A traditional economy is an old economic system that is based on customs, traditions, and beliefs. In this economy, which has been going on for generations, the distribution of goods and services is done according to established practices. The traditional economy is usually focused on subsistence. Families and small communities often produce their own food, clothing, and housing. Some examples of this are the US-Alaska, Canada, Denmark, and some communities living in Greenland. 

   Command economy : 

     A command economy is such a system in which, along with production and distribution, their prices are also determined. In this, the government determines the production target of the companies, and the government also controls the workers and prices. The government makes a five-year plan and gives priority to the need of essential goods and services. 

Market economy :  

    A market economy is an economic system in which two forces, known as supply and demand, direct the production of goods and services. A market economy is not controlled by any government but is based on voluntary exchange. Markets can be physical, such as retail stores, e-retailers, and many other examples. In physical markets, auction markets, and financial markets, prices of goods and services are determined by demand. 

Mixed economy : 

      A Mixed economy is a system that combines aspects of capitalism and socialism. In a mixed economy, markets are neither completely free nor completely controlled by the government. It lies on a continuum between capitalism and socialism. A mixed economy usually accepts private ownership of the resources of production and some government intervention. Countries like India, England and France follow a mixed economy.