Economic Systems - free markets and mixed economies.

The first 200 words of this essay...

Economic Systems -

An economy is a management of resources in which people make/produce goods and services. There are three different economic systems that are present, with every economy being categorised into one of these systems. These systems differ depending on their answers to the economic problem - which includes the questions what to produce? How to produce? And who gets the product?

In a free-market economy, the economy is extremely capitalist and is dominated by the private sector with great economic freedom. It gives the people the power and choice to spend the money that they earn. The government is neutral in the market and therefore, this economic system receives minimal intervention and regulation, which allows the decision of the producers and consumers to answer the basic economic problem. The needs of the public are provided by the firms, which are based solely on supply and demand. The market itself chooses the best goods to produce and in return, it will create a win-win situation because it allows both themselves and the people to benefit. People's consuming habits and competition between firms will determine the price of the goods and meet the needs of the public,