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Economic Theory

2. ECONOMIC SYSTEMS: KINDS AND FEATURES

Content

1. The main elements of economic system.
2. Traditional economy.
3. Capitalist economy.

4. Socialist economy.
5. Mixed economy.

Key words: economic system, traditional economy, Capitalist
economy, Socialist economy, Mixed economy.

1. The Main Elements of Economic System
An economic system is a way of answering these basic questions.

Different economic systems answer the above questions differently. An
economic system refers to how the different economic elements will solve
the central problems of an economy: what, how and for whom to produce.
It refers to the way different economic elements, individual workers and

managers, productive organization such as factories or firms and
government agencies are linked together to form an organic whole.
Economic system consists of various individuals and their institutions

like banking institutions, educational institutions and economic
institutions.
The main elements of economic system are:
1) the productive forces (land, labor, entrepreneurial ability, capital);

2) technical and economic relations;
3) industrial relations or property relations. Who owns the factors of
production;

4) the economic mechanism. This is a law, market infrastructure and
so on.
Economic system consists of various individuals and their institutions

like banking institutions, educational institutions and economic
institutions. The most general economic systems are:
1. Traditional Economy

2. Capitalist Economy
3. Socialist Economy
4. Mixed Economy

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