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Economics is a branch of social science that would deal with the production and distribution of goods and services to government, people and businesses. The money that is earned by churning out goods or offering services is what would act as the backbone of the company and this would also improve the economy of the respective country. Every nation is built on a sturdy economy. With the government spending a lot of money on research related to various economics topics, there is a huge demand for candidates who are pursuing this subject. Students who gain extensive knowledge on this subject can have a rewarding career.
Traditional economic system: This is the widely used traditional economic system. There is a major part of the world that is operating based on this type of economic system. Every individual who is involved in this economic system would be a specific role to play and the society would be closely related and completely satisfied. However, this economy does not have access to technological innovation and healthcare.
Command economic system: A small part of the economic framework is totally controlled by the power of the nation. In a few countries, most of the decisions are taken by the central government of the respective country. This type of economy is very close to the communist policies. The government is the key to improving the economy so it involves the planning phase to the re-dispensing of resources. The command economy will supply resources and would appreciate the people for their great work. In this type of economic system, the government of the country would own aviation, railways, utilities, etc. The government that is running under this economy will have the ability to create jobs and supply goods and services at reasonable prices to the end-users.
Market economic system: In this type of economic system, households, as well as firms, would determine the resources required and what type of goods should be produced and are the targeted audience who buys the goods. This is contradictory to the command economic system where the central government keeps on receiving huge profits. The government would not involve in this type of economy. There is no country that runs on this economic system. Every government is involved in regulating the trades, monopolies and honest businesses. In this system, government and the market would operate separately. This is what stops the government to act more powerfully. However, the government would be inclined to market interests. If consumers want a product, they would be ready to pay a high price to the business that is producing it. This brings a lot of profit to the entrepreneurs. The business would get an opportunity to invest highly in research and development. With the companies producing better products, the incentives keep adding to the company.
Mixed economic system: This is the combination of all the other economic systems. This is a hybrid system that is a major combination of market and commands economic systems. In this type of economic system, the government is not intervened in a few areas like transportation and also in a few sensitive industries like railways and defence. Generally, the government would come into force to enforce rules and regulations for private businesses to run in the country. There are a few countries across the globe which is running on this mixed economic system. These include France and India. The private is trying its hand in all industries efficiently. However, the government can come into existence to correct the failures in the market. If there is a monopoly in the market, then the government would break this system. Moreover, they would tax high on the harmful products that are produced like cigarettes.
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