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Advantages And Disadvantages Of Economic Systems

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An economy consists of a network of producers, suppliers, and consumers of goods and services in a local, regional or national community, however, with the aforementioned factors of an economy any respective country needs to determine an economic system. An economic system refers to the economic practices seen in the different types of economics systems. There are three types of economic systems which are the free-market, socialist and command economics. The free market system -also known as the capitalism -is an economic system where the government has little control over aspects such as ownership, products and services supplied and pricing. This means that in a capitalist society individuals own property and organisations, the goods and services …show more content…

Products and services supplied in a communistic society are determined by government, government decide what consumers need and further more decide what to produce. Each economic system has its advantages and disadvantages which help governments decides which economic system to use. Freedom to innovate is an advantage of the free market system which is positive but the system does have its flaws, one of them being that goods and services that are not profitable are not produced. Advantages in that of a socialist economy is that the ideally in an economic system like this all the needs of individuals will be met, meaning that education and health care would be free. The disadvantage in a socialist system is that the decision making process is slowed due to government and the bureaucratic nature of the system. Misuse of monopoly power is prevented by the command system, this is advantageous to the community, however, the system does not favour and respond to consumer …show more content…

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