The difference between: Market, Mixed and Economic System
This essay talks about three different types of economies system. The market economy, the mixed economy and the command economy system. I will start by defining each system and how the society has implement either one of them into their system.
A market system is defined by an economic system in which economic decisions, such as specialized production, distribution and the freedom to exchange among individuals use the market mechanism to determine the pricing of goods and services which are guided solely by the aggregate interactions of a country's citizens and businesses which causes a minimal government intervention or central planning on the economy. Market economies work on the assumption that market forces, such as supply and demand, are the best determinants of what is right for a nation's well being.
Although decisions about resource allocation are made by innumerable, independent producers and consumers, the whole thing is coordinated by the market mechanism. (Geographic Dictionary) These economies rarely engage in government interventions such as price fixing, license quotas and industry subsidizations. While most developed nations today could be classified as having mixed economies, they are often said to have market economies because they allow market forces to drive most of their activities, typically engaging in government intervention only to the extent that it is needed to provide stability. Although the market economy is clearly the system of choice in today's global marketplace, there is significant debate regarding the amount of government intervention considered optimal for efficient economic operations. (Investment Dictionary) Moreover, we have a mixed economy (which is a combination of a market economy and a command economy). A mixed economy therefore is an economy where there is more government intervention than in a free market economy in which many of the activities of...
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