The Three Different Types of Economies That Exist in the World

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Every society should answer three economic questions, which are what to produce? , how to produce? , for whom to produce? The reason why a society should choose what to produce is because a product of one society’s choice is not necessarily the choice of the other choice. A society should decide how to produce goods, it is due to the fact that not all societies have the same resources, some societies may have a lot of people in them so, if they want to produce a good, they can use their human resources to accomplished their task, in the other hand societies with a low populations but a high amount of machines, can use their resources to finish their task. Some countries may be able to provide items that other countries can not, because …show more content…
The second economic system is called directed or planned economy. In this system decisions are usually made by the government of that country. The third economic system is the one in the United States of America. It is called market economy. In the system, the three economic questions are answered by the people through buying and selling activities in the marketplace, a place where buyers and sellers exchange goods and services in some form of money. In the united states of America Since government has a bit involvement in the economy; it is actually called mixed economy There are five rights or features in the market economy. Which are private enterprise, right of the people to choose whether to own a business, what business to go into, and what to produce with only narrow government direction. The second one is private property. It means you can own, use, of arrange of things of value. You may set out of things you own by selling them, giving them away, or even by throwing them away. In our country, you can own any item and do what you want with it, as long as you do not disobey a law in doing so. The third one is profit, is the money left from sales after subtracting all the costs of operating the business. The fourth one is competition, the contention among businesses to sell their goods and services to buyers. The fifth one is freedom of choice, the right given to us as buyers to buy what and where we want. Economies are mixed systems because