Economics is the social science that deals with the production, distribution and consumption of goods and services and with the theory and management of economic systems. Economic system is a manner in which a nation uses its resources and manages production and distribution. In other meaning is an organized way in which a state or nation allocates its resources and apportions goods and services in the national community. The following are the types of economic systems; Command economy; is the socialist economic system with centralized government control of production, distribution policy. The economy has only has public sector, and government decides how will scarce resources were to be used and government also will decide what is to be produced and how much should be charged for goods and services accordance with national and social objectives. Planned economies are in contrast to unplanned economies, such as market economy where production, distribution and pricing and investment decision are made by private owners of the factors of production based upon their individual interests rather than upon a macroeconomic plan. Eg; The SOVIET UNION and communist China in the 20th Century operated under this economic system. Market economy; is the economic system ruled by opportunity of consumers to buy and producers to sell. All resources in a market economy are privately owned by peoples and firms, every business will aim to make as much profit as possible i.e profit is the main motive. Also there is consumer sovereignty and firms will only produce those goods which consumers want and are willing to pay for. Price is determined through the price mechanism. A free market economy is where an economy of all market within are free. Market economy is controlled by the forces of supply and demand. Eg; Western European Democracies are just few examples of countries that practice free market economy although it is widely used. Mixed economy; is the...
References: David.C.Colander, economics,2004, United States of America, 5th edition, MCgraw- Hill company.
Gary.E.Clayton, economics principles& practice, 1995, United States of America, glencce/ MCgraw-Hill.
-Roger A. Arnold, Economic in our Time, 1995, United state of America, Texas student Edition, Published by West publishing company.
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