The document outlines four main types of economic systems: traditional, command, market, and mixed. It provides details on the key characteristics of each system. A traditional economy relies on basic activities like farming and lacks specialization. A command economy gives a centralized government control over resources. A market economy is based on free markets and private ownership with minimal government interference. A mixed economy combines aspects of market and command systems, with private and public sectors operating side by side. Most modern nations have mixed economic systems.

1. ECONOMIC
SYSTEMS
1. Traditional Economy
2. Command Economy
3. Market Economy
4. Mixed Economy

2. Economic System – MEANING:
• An economic system is a means by which societies or
governments organize and distribute available
resources, services, and goods across a geographic
region or country.
• Economic systems regulate the factors of production;
including land, capital, labor, and physical
resources.

3. TYPES OF ECONOMIC SYSTEMS :
 There are many types of economies around the world.
 Each has its own distinguishing characteristics, although they all
share some basic features.
 Each economy functions based on a unique set of conditions and
assumptions.
 Economic systems can be categorized into four main types:
traditional economies, command economies, market economies,
and mixed economies.

4. TRADITIONAL ECONOMY:
 The traditional economy is very basic and the most ancient of the
four types.
 It is commonly found in rural settings in second and third-world
nations, where economic activities are predominantly farming or
other traditional income-generating activities.
 It relies a lot on people, and there is very little specialization.

5.  The traditional system, unlike the other three, lacks the potential to
generate a surplus.
 The traditional economic system is highly sustainable. In addition,
due to its small output, there is very little wastage compared to the
other three systems.
 Two current countries that follow a Traditional based Economic
System are Bhutan and Haiti and agriculture is the Primary Sector
in both countries.

6. Agriculture in Bhutan Agriculture in Haiti

7. Command Economy:
 In a command system, there is a dominant, centralized authority –
usually the government – that controls a significant portion of the
economic structure. It is also known as a planned economy.
 Ideally, the government centralize control over valuable resources
such as gold or oil. The people regulate other less important sectors
of the economy, such as agriculture.

8.  In theory, the command system works very well as long as the central
authority exercises control with the general population’s best
interests in mind.
 Command economies are rigid compared to other systems.
 They react slowly to change because power is centralized. That
makes them vulnerable to economic crises or emergencies, as they
cannot quickly adjust to changed conditions.

9. • North Korea is the only active country following command economic system.
- North Korea under Kim Jong Un
• China (PRC), Cuba and the USSR (now broken) followed command
economy in the past.
China under Mao Zedong - Cuba under Fidel Castro - USSR under Joseph Stalin

10. MARKET ECONOMY:
 Market economic systems are based on the concept of free markets. In
other words, there is very little government interference.
 The government exercises little control over resources, and it does not
interfere with important segments of the economy.
 Instead, regulation comes from the people and the relationship between
supply and demand.

11.  The United States and England are examples of market economies.
 Arguably, growth is highest under a market economic system.
 The market economy’s greatest downside is that it allows private entities
to amass a lot of economic power, particularly those who own resources
of great value and so, distribution of resources is not equal.

12. New York Stock Exchange,
Wall Street,
USA .
Piccadilly Circus & its famous
advertising screens,
UK.

13. Hong Kong
 Traditionally billed as the world’s freest economy, Hong Kong remains
one of the most capitalist countries and strongest free market economies.
 It’s almost non-existent tariffs and small government are a recipe for
capitalist success. Although it is technically a “Special Administrative
Region” of China, it stands on its own as an independent free market.
 Hong Kong’s gross domestic product (GDP) per capita of over $40,000 is
one of the highest in the world, more than four times higher than China’s.

14. MIXED ECONOMY:
 Mixed systems combine the characteristics of the market and
command economic systems.
 For this reason, mixed systems are also known as dual systems.
Sometimes the term is used to describe a market system under strict
regulatory control.
 Most industries are private, while the rest, comprised primarily of
public services, are under the control of the government.

15.  Now-a-days, many developed and developing countries are
following this mixed system. Some are coming out of their old market
system into Mixed system.(Cuba, Russia – Command to Mixed; USA,
UK, Japan, Germany – Market to Mixed).
 Mixed systems are the norm globally. Supposedly, a mixed system
combines the best features of market and command systems.
 However, practically speaking, mixed economies face the challenge
of finding the right balance between free markets and government
control.

16.  India, France, Sweden are some of the best example of Mixed
economy countries. INDIA adopted Mixed Economy System from the
post – Independence period itself.