Economics
ECONOMIC SYSTEMS
The various economic systems found in today’s world -
1>Traditional/Subsistence
2>Market/Free competitiveness
3>Planned
4>Mixed
They all face common economic problems-
>what to produce
>how to produce
>for whom to produce
But first what is an economy?-An economy is the realized system of human activities related to the production, distribution, exchange and consumption of goods and services of a country or other areas
What is an economic system?-An economic system is a system that involves the production, distribution and consumption of goods and services between the entities in a particular society.
W hat are the basic problems that an economy faces??-
The main problem that an economy faces is that of solving the problem of limited resources and unlimited wants.
1>>The traditional economy – the traditional economic system is a system in which resources are allocated by inheritance and where there is a strong social networking and is also based on primitive methods and tools..
Members of a traditional economy often make their own clothing and tools. Most countries were historically traditional in the economic sector and have now been replaced with command, market, and mixed economy.
There are still parts of Africa, East Asia, India and South America which are run traditionally.
Solving economic problems – The places or regions following this economic system do not have a problem solving economic issues of- What to produce …. How to produce …For whom to produce etc...
The issue of what to produce is solved by producing commodities; depending on the availability of the resources. Also these resources are found locally, there is no foreign input and the consumption of goods so produced is also local .
For example – a tribe of Masai would probably produce more of baskets and ropes to gather and collect fodder and wood than spend their time building a automobile or something of that sort.
Next comes “How to produce”- this too...
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