ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What (and how much) to produce?
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How to produce?
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For whom to produce? (How to distribute income?)
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All of the above.
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Detailed explanation-1: -An economic system is any system of allocating scarce resources. Economic systems answer three basic questions: what will be produced, how will it be produced, and how will the output society produces be distributed?
Detailed explanation-2: -Economists address these three questions: (1) What goods and services should be produced to meet consumer needs? (2) How should they be produced, and who should produce them? (3) Who should receive goods and services?
Detailed explanation-3: -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, mixed economies, and market economies.
Detailed explanation-4: -Historically, there have been three basic types of economic system: traditional, command, and market.
Detailed explanation-5: -Economic Systems. The way in which a society answers the three fundamental economic questions is called an economic system. More formally, an economics system is a process or mechanism for answering the three fundamental questions.