Question

How can you differentiate between various economic systems that exist

Answer 1

An economic system is defined by the way scarce resources are distributed in an economy.

There are 4 types of major economic systems which are following;

1. A mixed economy is an economic system, like its name is a mix of elements of planned economies, free markets with intervention of the state and public enterprises.
2. A command economy is a system where the government is key decision maker of what goods and services will be produced and introduced by the economy.
3. A market economy is the one in which the investment, production and distribution are dictated by the forces of demand and supply.
4. A traditional economic system is a result of customs, history and cultural norms which include the rules and manner of their distribution as well.