IntroductionEconomic systems are the organized manner by which a state or nation allocates its resources and distributes goods and services throughout the national community. An economic system is generally defined as a country's plan regarding its services, produced goods, and exactly how its economic plan is implemented. There are three types of economic systems: the command economy, the market economy and the mixed economy. The command economy is also sometimes called a planned economy. This type of economy expects that all major decisions related to construction or production, distribution, prices of raw materials and services are all made by the government. However, in a market economy, national and state governments play a minor role. The market hypothesis plays a major role in choosing the right path for a country's economic development. The mixed economy combines elements of the command economy and the market economy in an interdependent system. Some features of market and command economy economic systems are taken to form this type of economy. The market system is clearly the most efficient economic system. A market economy can therefore also be known as a free market economy. It is a type of economic system in which trade and exchange of goods, services and information takes place. The term is normally applied to countries or management regions that follow this approach. Its operation depends essentially on market forces, namely supply and demand. Each commodity is allocated and distributed based on the “price” principle. Generally, the price of a product skyrockets when its demand exceeds supply and when the opposite happens. |Since markets are governed by law...... middle of paper......their own product markets, and the fact that they do not control the taxes they pay is one problems. Merchants often complain that tax rates are too high for the services provided. The old communist regimes of Eastern Europe were centralized economies, but control was not complete. Other examples are Malaysia and China which use the mixed economy. Overall, the statement shows that the market economy is clearly the most important efficient economic system due to freedom of decision. Furthermore, some of the countries that use a totally command economy move towards a mixed economy and the countries that use a mixed economy move towards a market economy.Bibliography1. Sloman, John Economics.2. http://www.economywatch.com3. http://en.wikibooks.org/wiki/Main_Page4. http://www.dict.cn