Topic 25 · intro
Economic Systems
Every society answers three questions in its own way: what to produce, how, and for whom — that is the type of economic system.
The three main questions
What to produce, how to produce, and for whom. The answers depend on who makes the decisions — tradition, the state, or the market.
Types of systems
Traditional (by custom), command (the state decides), market (supply and demand decide), mixed (the market plus a role for the state).
Mixed economy
In reality almost all countries are mixed: the market allocates resources, while the state corrects failures and provides social protection.
🎯 Now possible
- name the three main questions of economics
- tell the types of economic systems apart
- explain the mixed economy
Cheat sheet
3 questions: what · how · for whom
Traditional — custom
Command — the state
Market — supply and demand
Mixed — almost all countries