This system is found in agricultural societies where people live the same way their parents and grandparents did. People in these systems produce what they need to survive by farming or hunting and gathering. They make their own clothing and tools, and trade any extra food or items with others in their society.
In a market system, a country’s economic decisions are based on what its people want to buy and sell. People can own their own businesses and produce what they want. In a market economy, supply and demand for a good and service determines what to produce and how to produce it. Producers will make their product in the way that costs them the least amount of money so they can make a profit.
Economists measure a nation’s economic performance by a standard called Gross Domestic Product (GDP). Economists use it to determine the health of a company’s economy and compare it to other economies.