Economic Systems

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  • Created by: Jennifer
  • Created on: 01-05-11 18:47

An economic system is the method used by society to deal with production, distribution and consumption.

- Centrally planned, market and mixed.
* Centrally planned economy is a type of economic system where the state owns and allocates resources.
* Market economy is where households own most resources and markets allocate resources.
* Mixed economy has a private and public sector and uses both market forces and state control to allocate scarce resources between alternative users.

Advantages of a market economy.
- Competition gives firms the incentive to produce

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