Economic System And Economic Systems

910 Words4 Pages
For this essay I will be focusing in on the three different economic system,which are known as centrally planned economy, mixed economy, and market economy. I will also be explaining why internationalizing firms should be aware of the differences between all three economic systems and what roles should the government be taking in the free market systems. Before I begin defining the different economic systems I would like to first explain what an economic system is. Every country differs in what economic system is being used. An economic system is a system of producing goods and the exchange of goods and services. An economic systems also includes a process which is used to allocate its assets. Culture can have a big impact because of a country 's economy. Just as a country 's economy state differs from country to country so does its culture. Why does it have an effect on a country 's culture we ask? The difference between having an individualist or a collectivist culture is where we see it. In an individualist culture we see more people being rewarded then we see in a collectivist culture. Being rewarded with things such as low tax rates which inspires them to continue with their activities of their culture.
As mentioned in Chapter 7 no nation is either considered to be fully individualist or fully collectivist. National economies are arranged on a scale in which we see the three different economic systems. The scale is setup in a way in which centrally planned economy is

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