What is an economic system?

An economic system is how a country:

• Organises production

• Distributes goods and services

• Allocates scarce resources

 Market Economy

✅ Definition

A market economy is a system where:

• Prices and decisions are controlled by demand and supply

• There is very little government interference

Planned Economy (Command Economy)

✅ Definition

A planned economy is where:

• The government controls everything

• It decides:

  • What to produce

  • How much to produce

  • Who gets it

Mixed Economy

✅ Definition

A mixed economy combines both:

• Market system (private sector)

• Planned system (government sector)