Different types of economies

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  • Types of economies
    • Command economies
      • An economy in which resources are allocated partly through price signals & partly on the basis of intervention by the state
      • Most resources are allocated by the state & market mechanism only plays a small part
      • E.g. China
    • Free Market economies
      • An economy in which market forces are allowed to guide the allocation of resources
      • The majority of resources are allocated through markets rather than government & planning
      • Healthcare would be entirely financed by the private sector & there would be no welfare benefit system
      • E.g. Hong Kong/ US are the closest examples
    • Mixed economy
      • An economy in which resources are allocated partly through price signals and partly on the basis of intervention by the state
      • Typically between 40% & 60% of resources are allocated by government & the free market
      • Greater redistribution of income through welfare benefits such as state pensions,unemployment & sickness benefits & child benefits
      • The healthcare system is administered & financed by the state
      • E.g. The UK

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