Types of Economic Systems

A traditional Economy is dominated by methods and techniques that are strongly supported socially wise, but are out of date and old fashioned. Resources are inherited. A traditional economy is environment friendly, fosters the sense of community. However, there is no competition and technology is limited.

A Command Economy is planned and controlled by a central administration. The government dominates the direction in which the economy will go, but the people own the means of production. A command economy is found in a communist country or even sometimes in a capitalist nation in a state of emergency.

A Market Economy is the complete opposite of a command economy. A market economy works on supply and demand. There are barely any government interventions or price fixing. Production, Exchange and Distribution is controlled by private corporations and individuals. Capitalist economies are market economies which are also known as free market economy.

A mixed economy is an economy that has a mix of economic systems. It contains both private owned and state owned enterprise. America's economy is a mixed economy. You have plenty of freedoms such as to hire, fire, protest but there are restrictions such as the Sherman anti-trust law.

Socialism is a cooperative society in which the means of production are owned collectively by the people or the government.