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…