Explanation of economic system |what is an economic system| definition of economic system...

what is an economic system?

An economic system is an organized way in which a country allocates resources and distributes goods and services across the whole nation. The term economic system may also apply to a specific region it includes the combination of several institutions entities agencies decision-making processes and patterns of consumption that all make up the economic structure of a specific community. Hence it is a type of social system defining the economic system of a nation today is much more complicated than it was in the past ancient economic systems were relatively simple before money existed people traded in goods and there was a barter system in ancient systems there were relatively few treaties & rules of engagement every economic system focuses on the supply of goods and services and demand the supply side has three factors labor land and capital economic systems define how goods and services are produced how they are distributed and at what price they are sold. There are three main types of economic systems in a market economy prices are determined by market forces in a planned economy as the central authority makes all decisions regarding production distribution salaries investment and prices a mixed economy is a combination of market and planned economy if the economy gets into trouble, for example, the government intervenes the USA the UK, Canada, Australia, Germany, and Japan claim to have a market economy. However, during the 2007 2008 global financial crisis, their governments intervened to bail out collapsing banks in a true market economy those banks would have died and new ones would have emerged most countries that claim to have a market economy actually have a Mixed Economy.