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The type of economic system of a country depends on how it allocates resources. There are four types of economy.
Traditional type of economy
The oldest type of economy in the world is the traditional economy, by which some countries still operate today. These are mainly the countries of the world in which agriculture is predominant. In this type of system, the state economy spends more than it receives.
Command economy type.
The command economic system is also called centralized or command-planned. This type of economy was the basis for the communist philosophy. It works like this: the state has an economic development plan according to which industries produce goods and services. This plan dictates what to produce, in what volumes and at what price to sell.
The market type of economy
The market economy is also called a free economy, because in it firms and households act in their own interests. This type of economy is the opposite of a command economy, where the central government gets the profits.
In a pure market economy there is no government intervention, the government is separate from the market. In fact, this is not always the case: there is not a single type of pure market economy in the world.
Mixed economy type.
A mixed economy is a combination of different types of economic systems, most often a market economy and a command economy. Most often the market is free from government regulation, except for a few key industries: transportation, defense, and railroads.
Economy as an economy
Economy as an economy is a system of economy, which provides society with various goods, includes the branches of material production (industry, transport) and intangible sphere (culture, education).
