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Different Types Of Economic Systems Essay

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Different types of economic systems There are different types of economic systems. Their most important differences derive from he way the economic decisions are made (decision makers are individuals or government) and by the kind of ownership of the means of production (private or public). The most characteristic economic systems are the following: traditional economy: it is met more in the early stages of economy, people were performing economic tasks for non-economic reasons, its structure is more based in social structure and affects by traditions, religion, etc command economy: is basic characteristics are the limited freedom of choice and the collectivity (collective ownership of productive means, collective decisions etc). It operates …show more content…

The financial markets and the financial intermediaries have this role in the contemporary economic systems, by providing financial services that have two main objectives: reduce the costs of the money transfer between borrowers and lenders and make the proper distribution of capital resources in order to endure economic growth, safeguard liquidity and facilitate risk sharing. a) Definition of “financial intermediary” A financial intermediary is an entity that acts as a mediator between two parties in a financial transaction, business deal, investment etc. As financial intermediary is possible to act a commercial or investment bank, a broker or a consultant. Financial intermediaries offer a number of services such as information and counseling with basic purpose to assure benefits for their clients (borrowers, lenders, investors, enterprises, consumers etc), including safety and liquidity. In money markets, for example, banks act as intermediaries between depositors, who want to benefit a certain interest income by depositing their money in bank accounts and borrowers, who are looking for available capital to borrow in order to perform certain economic

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