Economic Final Report Types of economic systems

Economic systems vary from one nation to another. Traditional economic systems refer to an economic system founded by tradition. The services and goods that people provide through the work they do, how people exchange and use the resources are trends that follow permanent patterns. These are not dynamic economic systems because there are minimal changes. In this economic system, people live on static standards. They do not enjoy much occupational mobility and financial mobility (Gregory and Robert 19). However, it is possible to predict economic relationships and behaviors. People are aware of what they are expected to do, why they trade, they know what others should give to them. In traditional economic systems, the interests of the community are of great priority than individual interests. People collaborate at work and labor proceeds are shared equally. However, in some traditional economic systems, individuals respect some personal privacy. However, it comes with restrictions as such individuals are given a strong obligation set, which they owe to the entire community. In the current world, traditional economic systems are being applied in the workplace among Aborigines of Australia and other minority groups (Conklin, 15).

The next economic system is the planned or command economic system: in this system, the economy is under government control. The government makes decisions about how to distribute and use resources. The state regulates wages and prices. The government determines the form of work an individual will do to some extent. In the past centuries, the state assumed different levels of controlling the economy. In some systems, the government exercise control exclusively on major industries. This means that the state exercises great control on the country's economy. A good example of this economy is the Soviet Communist Union. In 1980s, the collapse of the bloc of communist led to the halt of a variety of command economies across the globe. However, Cuba is the only country holding onto its command economic system (Gregory and Robert 43).

From the market economies, individuals make critical...

Companies and individuals interact in the market place thus determining how good will is distributed and how resources will be allocated. Individuals make decisions on how their personal resources will be invested, the training and jobs they should take, what services and goods they should produce. Individuals make choices on what they want to consume. Within the pure precincts of a market economy, individuals dominate as the state is purely absent in economic affairs (Conklin 27).
A mixed system of the economy: this economic market integrates elements of command and market economy. Individuals in the market make most economic decisions. However, the state enjoys an active role in distribution and allocation of resources. Currently, America being among the most advanced countries is founded on a mixed economic system (Gregory and Robert 90).

Functions of economics systems

All systems of economy offer solutions to four major issues; they determine services and good that will be produced, they determine how goods are produced, the markets for the goods, how products and services will be allocate for present and future use, economic systems also determine future investment.

Key characteristics of economic systems

In Market economic systems, individuals control and own all the resources. Individuals competing for profits make economic decisions. Freedom is of great importance to individuals. Individuals make economic decisions based on primary principles of demand and supply. The underlying motive of increasing work is profiting compared to quotas. In command economies, the state or government is the central authority making decisions, as well as determines how resources will be allocated. It is relatively easy for change to take place. Individuals have relatively little freedom. Businesses do not compete and do not operate on the motive of gaining profits. In command economic systems, consumers have limited choices presented by the market place because manufacturers are quota oriented. Firms and factories are poorly run resulting in shortage in commodities in the market place. The state dictates jobs that…