Types of Economic System
Economic systems decide what to produce, how and for whom, and range from market to command to mixed economies.
▶ Interact
Play with the controls to see the idea in action.
📘 Learn
Economic systems decide what to produce, how and for whom, and range from market to command to mixed economies.
- Market economies rely on private firms
- Command economies are planned by the state
- Most countries are mixed
🧠 Quick quiz
Three questions. Score 2 or more to complete the topic.
What is Types of Economic System?
Within Economics & Civics, which covers money, markets, business, government, law and citizenship: how societies are organised and run, this topic explains Types of Economic System. Economics and civics topics explain how money, markets, laws and government affect people, so each topic here pairs a clear definition with a model.
Check that you can explain Types of Economic System in your own words and give one example from everyday life. If you can do that, you have understood the core idea.
Understanding Types of Economic System helps you read the news critically and weigh up policies, choices and arguments about society.
Types of Economic System in detail
An economic system is how a society decides what, how and for whom to produce. In a market economy, private individuals and firms make decisions guided by prices and profit, with little government involvement. In a command (planned) economy, the government owns resources and makes the decisions, as in the former Soviet Union.
Most countries have a mixed economy, combining private enterprise with a public sector that provides services like health and education and regulates markets. Traditional economies rely on custom and subsistence farming. Each system has strengths and weaknesses relating to efficiency, equality, freedom and innovation.
How the interactive helps you understand Types of Economic System
Click a card to flip it and reveal the answer, then move on to the next one.
Before you change anything, predict the result. Then change one value at a time and check whether your prediction was right. This is a quick way to build a correct mental model of Types of Economic System.
Real-life uses and examples
- Use Types of Economic System to weigh up the pros and costs of a policy or decision.
- Explain Types of Economic System to a classmate using a choice you make yourself, such as spending pocket money.
- Give a balanced answer about Types of Economic System by considering more than one point of view.
Common mistakes to avoid
- Confusing a short-term effect with a long-term one.
- Giving an opinion without evidence or a clear economic or civic reason.
- Learning the definition without testing it. Use the quiz and the interactive to check that you can apply the idea.
Frequently asked questions about Types of Economic System
What is Types of Economic System?
Economic systems decide what to produce, how and for whom, and range from market to command to mixed economies.
What are the most important points about Types of Economic System?
The main points are: Market economies rely on private firms; Command economies are planned by the state; Most countries are mixed.
Why is Types of Economic System useful?
Understanding Types of Economic System helps you read the news critically and weigh up policies, choices and arguments about society.
How can I practise Types of Economic System?
Open the interactive at the top of this page and change the controls one at a time. Predict the result before each change, then take the three-question quiz. A score of two or more marks the topic as complete on this device.
Which topics are related to Types of Economic System?
Related topics in Economics & Civics include Borrowing and Credit, Taxes, Gross Domestic Product.