Question

research about the advantage and disadvantage of all different economic system

Answer 1

Economic systems:

Definition :

A properly organised economic system leads to the holistic development of a country in all the sectors of economy.

It is a means by which governments analyze and organise available resources and goods and services then distribute it across the country so that everyone who requires it, can have access to the resources of the country .

Factors of production, including land, capital, labor, and physical resources are also regulated in economic systems to have as best efficiency as possible .

Types:

1) Traditional economic system

Advantages

1) It works with the natural environment

It creates a self-sustaining economy where the focus is to meet basic needs through what can be obtained by the natural environment

2) It is an economy that keeps things simple

Very little trade is required in such an economy, which means all resources can be put toward meeting the needs that are required for survival.

Disadvantages

1) Choices offered in it are less

Advancement opportunities doesn’t exist within the traditional economy

2) Creates specific health risks

With the isolation that a traditional economy provides, specific health risks which apply to that community alone increase.

2) Command economic system

Advantages

1) These can prevent abuse of monopoly power.

2) Could produce goods which benefit society and ensure everyone has access to basic necessities.

Disadvantages

1) Unable to respond to consumer preferences.

2) Command economies tend to be very bureaucratic with decisions held up by planning and committees.

3) Market economic system

Advantages

1) Market system automatically responds and adjusts to the people’s wants

2) Government does not have to take decisions on basic economic questions

Disadvantages

​​​​​​1) Market system may not produce certain goods and service

2) Factors of Production is not employed if it is not profitable

4) Mixed system

Advantages

1) Limits government interference

2) Reduces market failure

Disadvantages

1) Too much inequality

Mixed economies are criticised by socialists for allowing too much market forces, leading to inequality and an inefficient allocation of resources.

2) Government failure

Mixed economies are criticised by free-market economists for allowing too much government intervention.