Three Major Types Of Economies In The United States

There are three major types of economies that are present in today’s world. They are called traditional, command, and market economies. Each type has its own advantages and disadvantages, which are very present in the societies that use each one. There are major countries that have implemented each of these economies over the years. Some Native American tribes used a traditional economy before they suffered from the arrival of new settlers. China, Cuba, and North Korea all use a command type economy today. As for a market economy, it can be found in the United States currently. The traditional economy is the least used and often forgotten about economy. It does, however, have several advantages. By definition, a traditional economy is “ …show more content…
A command economy is “a socialist economic system in which production and distribution of goods and services are controlled by the government and industry is mostly publicly owned.” This type of government has some upsides and downsides, and it is a key part of any communist society. A plus of a society using this economy is that companies can quickly and effectively mobilize its economic resources to complete huge projects and attain its goals. Another is that by controlling the market, the government can prevent monopoly power abuse. Lastly, a command economy provides a central planning authority that can carry out long-term goals. Downsides to this economy are few, but can cause huge problems. For example, it can tend to not get up-to-date information about its consumers needs, so it may not make the right amount of something. The planners may also have trouble communicating with one another and not produce the right exports for the global market. The major problem with this type of economy, however, is that it creates a very powerful government that may limit individual rights. This can cause the government to end up controlling more aspects of the individuals lives than just the market, and that might make some unhappy with the government or make some want to rebel, as was the case in …show more content…
The best example of a market economy is right here in the United States. A market economy is defined as “a capitalistic economic system in which there is free competition and prices are determined by the interaction of supply and demand.” This basically means that there is limited government interaction and the people run the economy. This system has many benefits; however, it also comes with some drawbacks. One example of a benefit for this economy is that it is very efficient. The objective of a market economy is to “generate products with a least of wasted sources.” This means that producers will work to prevent waste and consumers will make the most out of their resources. Another great advantage of the market economy is that it has incredible economic growth. This, in turn, leads to enhanced GDP and a better standard of living. There are a few downsides to the market economy. One is that the cost of production can be very high and sometimes the consumers may not pay for it; someone else might end up paying a big price for the by-products of production. Another disadvantage is that a producer may form a monopoly a give lower salaries to laborers. A final huge drawback is that wealth isn’t distributed evenly. This can cause problems amongst the people while a small group live in prosperity while the rest lives in