“An economic system is the way a society sets about allocating which goods to produce and in which quantities. Different countries have different methods of tackling the economic problem.”(posted 7098 days ago)The basic economic problem is in establishing effective use of resources. We live in a world that has ever growing consumption demands and ever decreasing resources.
There are three main types of economy.
A market or capitalist economy is where resources are allocated by prices without government intervention. The USA and Hong Kong are new examples of market economies where firms decide the type and quantity of goods to be made in response to consumers. An increase in the price of one good encourages producers to switch resources into the production of that commodity. Consumers decide the type and quantity of goods to be bought. A decrease in the price of one good encourages consumers to switch to buying that commodity. People on high incomes are able to buy more goods and services than are the less well off. In a command-planned or socialist economy the government owns most resources and decides on the type and quantity of a good to be made. The USSR and North Korea are examples of command economies. The government sets output targets for each district and factory and allocates the necessary resources. Incomes are often more evenly spread out than in other types of economy.
In a mixed economy privately owned firms generally produce goods while the government organises the manufacture of essential goods and services such as education and health care. The United Kingdom is an example of a mixed economy. you need to understand all types of economies if you are going to write a report on the mixed economy. You could also consider looking at transitional economies.