There is no country on earth without an economic system to distribute resources and trade goods and services, and simply the economic system is used to control the five factors of production, which are labor, capital, entrepreneurs, physical resources and information resources. There are four main types of economic systems in the world which are traditional, command, market and mixed. Each economy has its pros and cons, Below we will examine each system in detail.
Main types of Economic system
-Traditional economic system
This kind of system concentrate on services and goods that are directly related to its beliefs, customs, and traditions. It relies heavily on individuals and doesn’t usually show a significant degree of specialization and, it is not special in one thing.
The pros and cons of the traditional system are that tradition and custom are preserved while it is virtually non-existent in the market mixed economies, and the main cons are that traditional economies do not enjoy the things other economies take for granted.
-Command Economic System
This is the next step after the traditional one. The most notable feature of a command economy is that a large part of it is controlled by a centralized power often, a federal government. This kind of economy tends to develop when a country finds itself in possession of a very large amount of valuable resource
-Market Economic System
In this system, the government does not control any resources or other relevant segments. Instead, the entire type is regulated by the people and the law of supply and demand in the markets, In theory, a market economic system enables an economy to experience a high amount of growth.
-Mixed Economic system
Mixed System is a mix of two kinds of previous types It is sometimes also referred to as a dual thing. Although there is no clear-cut definition of a mixed system, in most cases the term is used to describe market economies with strong regulatory oversight and government control in specific areas.