Answer:
Economics is the study of how scarce resources are utilised and the choices made on allocation of these goods for production, distribution and consumption to satisfy needs. This is important because _by understanding how resources are distributed or exchanged, we can provide policies based on them to achieve maximum efficiency. There are four different basic economic systems in the world today. They are traditional economy, command economy, mixed economy, and market economy. Each one has its own unique advantages and disadvantages. For example, one of the great things about traditional economy there is more individualised role in the economy, cultures and traditions are greatly preserved and this leads to social satisfaction_but the command economy is better at resource distribution because majority (or valuable resources like oil and critical industries like railways) of the resources are controlled and managed by the government on large scale. Although there is reduced individual role, this economy provides more jobs, centralised and controlled prices for goods and services and it also provides access to health facilities. A major weakness of the market economy is that because it lacks major government intervention, there is exploitation of consumers by monopoly. Also, due to competitive nature of the free market, economy needs are priotized over social needs (such as healthcare). There is also an unequal income distribution, but the mixed economy doesn’t have that same problem because there is a combination of the command and market economy exhibited hence there is government intervention through tax policies to create a more equal income distribution. I believe that the mixed economy system is the very best economic system for the United States because it creates a balance in the economy by minimizing monopoly, creating incentives to prioritise social needs such as affordable education, healthcare system (something that would actually work and benefit the people) and more social security. A balance of the economy system through mixed economy would go a pretty long way for us. These things are very important because it would create a more satisfied society especially when access to basic needs are priotised. If I didn’t live in the United States, Sweden, Denmark, Switzerland or Finland would also be good places to live because a higher priority placed on human needs such as free education in some of these countries and the existence of equality on how people live (especially the education system). Countries whose economies are a free market (market economy) tend to have more incentives for business. Although this creates a competitive markets and hence more innovations, the lack of government control leads to a more self-driven or centred society. Despite the few advantages of the controlled economy, many countries who operate on this type of economy have lower levels of happiness when compared to a mixed economy. Now that I have studied the different economic systems of the world, I understand economics better, and I feel more prepared to __tackle global economic problems by creative effective and sustainable policies that would serve the greater good of human population.
Step-by-step explanation:
Understanding economics is important because we are able manage resources and employ best strategies for its distribution. The four main economic systems include the traditional economy, command economy, mixed economy, and market economy.
The traditional economy is more of an ancient setting and majorly rural based, second or third world countries. Vast majority of population depend on farming as a primary source of livelihood. Incentives for social needs are hardly implemented hence reduced access to healthcare as well as innovative transport systems
The controlled economic system are more communist oriented. Everything is controlled from a central core and gives less roam for societal roles. Despite the few perks which includes a proper resource management (this is if there is good governance), controlled prices on goods, more government jobs etc., it usually leads to less happy society.
The market based economy gives more free will to the people in regards to market based decisions. An advantage of a free market is less government power and more innovative measures are employed by businesses due to competitive market. Although this market system allows for unequal distribution of income as well as customer exploitation through unfair prices placed on goods and a monopoly-based market
Mixed economy creates balance between a market and a controlled economy. Although there is roam for a free market there is government regulation of business through taxation incentives, fair trade as well as provision of systems to serve the society.