Four Types Of Economic System

A countries ' economy is among the strongest forces which affects the political power and the quality of life. An economic system is an organized way in which a state or nation allocates its resources and apportions goods and services in the national community (“What is an economic system definition and meaning,” n.d.). Every government must have a role in the economy of its country. This role is always the key for knowing what differs one economy from the other. The economic systems has four types which are traditional, command, free market & mixed. Every system of them has it weaknesses, strengths and tendencies. The first type is the traditional system, from its name it is the oldest type of economy in life where goods and services were

Moreover, the government monitor the worthy resources and leaves the remaining resources to be monitored by the people like agriculture. The third system is the market system, it is too comparable to the free market in which the government controls spirited resources and leave the majority branch to be controlled by the plain people and give the people the full decision to decide how to produce the supply and how much the needed demand is. The main advantage of the market system is that the market and the government are separated totally. Lastly, there is the mixed economic system where is a mix from the market and command economies as many differences appear with mixed economies in the free markets and others are controlled by the government. The main disadvantage of this system is the suffrage of other economy 's falling (“The 4 Types Of Economic Systems Explained,” n.d.). This proves that every system of the four systems must have role of government in it to be well controlled and well

One of these roles of the government is the economic systems. In the free market system, the free market is a self-sufficient system where the normal people are the main source of decisions for the products and the prices. The government role in this market is the most large assure for the people playing in the market to be fair and to supply national infrastructure needed. In addition, some regulations are required to avoid unprincipled people as not to gain inequitable advantages. Moreover, the government has legal role in organizing large projects for the benefit of the people like national defense and aviation safety. When the government begins to interfere in the free market decisions, the efficiency and the growth were reduced. But there is not any route to limit the number of administrators to make better decisions rather than the private enterprise in the market (Cohen, n.d.). On the other hand, there is the role of government in the command system. Here the government plays the major role in the control of the goods and services which means that it is the one which decides what to produce, how to produce and distribute the goods and services. The command economies were always correlated with political atmosphere of the communism. In this system the government has its larger role compared to the