Main Economic SystemsAn economic system is a way how a society produces and distributes goods and services. It involves how things are made, who gets to make them, how they are…

Main Economic SystemsAn economic system is a way how a society produces and distributes goods and services. It involves how things are made, who gets to make them, how they are distributed, and how people get access to them. It’s like a set of rules that everyone in society follows when it comes to money and trade. Economic systems are classified into four types: command, market, mixed and traditional. Each system has its advantages and disadvantages.The essential economic choices in command economies are made by the governments. The government decides which commodities will be produced and at which level and at what price they will be sold. The aim of a command economy is to meet all needs of society and prioritize social welfare over profits. The advantages of a command economy or planned economy are that central planning allows the elimination of market failures, and in theory, better allocation of resources, prioritizing social needs over profits. Disadvantages, on the other hand, include limited consumer choice and a lack of incentives for innovation.Decision-making in a market economy is dictated by price fluctuations that happen between producers and consumers. Main characteristics of the market economy are private ownership, competition, and minimum to no government intervention. The amount individuals pay for items is determined by the law of supply and demand. One advantage to this type of economy is that buyers are able to locate what they want and purchase as many of the items as they want and can finance. An issue is that there is no pricing stability, and enterprises that are mishandled can fail.A mixed economy combines elements of command and market economies. All of the societies present-day have features of both systems and are frequently called mixed economies, despite the fact that almost all societies tend to lean toward one form of the economy more than the other. A mixed economy aims to reduce the drawbacks of both systems while implementing the advantages. In a mixed economy, government can intervene in key sectors like education, or healthcare while leaving other, less important from the perspective of wellbeing of the society, sectors to private companies.With traditional economies, historical norms and habits govern what and how things are created, distributed, and spent. Every individual within this society understands their place in the greater group. Because occupations are handed down through generations, there is minimal change in professions over time. Traditional economic systems are often found in rural or remote areas where access to modern technology and infrastructure is limited. These systems tend to be self-sufficient and sustainable, but they may also be susceptible to external shocks and disruptions. While money can be used in traditional economies, but bartering is more common than using money. VII. Complete the table.Economic System Advantages DisadvantagesTraditionalMarketCommandMixed