Essay about The World 's Economic Systems
• Traditional economy
• Market economy
• Command economy
• Mixed economy
However, there are unlimited variations of each type. An economic system must define what to produce, how to produce it and for whom to produce it. Depending on the products produced and the environment, certain economic strategies will be more successful than others. A traditional economic system is one in which each new generation retains the economic position of its parents and grandparents. Traditional economies rely on the historic success of social customs. South America, Asia and Africa support some traditional economies of thriving agricultural villages. Tradition decides what an individual does for his living, so industry, clothing and shelter are the same as in previous generations. One of the few advantages existing in a traditional economy is that the roles of individuals are clearly defined. Every member of the society knows exactly what they are to do and most don 't have any complaints about it. There are also many disadvantages to this type of society. These societies are often very slow to change and when new technologies are introduced, these ideas and techniques are discouraged.
Market economies are based on consumers and their buying decisions rather than government control. Market trends and product popularity generate what businesses produce. The producers choose how to make products based on the most…