Importance of Different Economic System



An economic system defines the mechanism of production, distribution and allocation of goods, services and resources in a given society. National economic systems can differ in many ways, including how goods and services are priced, how much the government regulates economic activity, and how managers and workers interact with each other and with the government.
We can think of a nation's economy as existing along a continuum toward one of two major economic models. At one end of the continuum is the purely capitalist economic system, which assumes that free-market competition is the best way to allocate resources, increase productivity and efficiency and lower costs.
At the other end of the continuum is the purely socialist economic system, which assumes that the public or cooperative ownership of production is the best way to allocate resources. The resources of production are owned by the state, based on the assumption that private ownership leads to inequality and the exploitation of workers.

Types of Economic Systems

Examples of contemporary economic systems include:

Social Structure

As we noted earlier, economic systems can have wide-reaching effects on how societies are organized. Social structure refers to the recurring, orderly and patterned relationships that exist between different elements of society. These patterned social arrangements exist across three different levels of the social system:
  • The macro-level social structure refers to the structure of the socio-economic class a system, social institutions, and other patterned relationships between large social groups.
  • Meso-level social structure refers to the structure of social network ties between individuals or organizations.
  • Micro-level social structure refers to the structure of social norms that shape the behaviour of individuals within the social system.

Economic Growth

Economists can measure the performance of an economy by looking at the gross domestic product (GDP), a widely used measure of total output. GDP is defined because of the market price of all goods and services produced by the economy during a given year. The United States, it is calculated by the Department of Commerce. GDP includes only those goods and services produced domestically; goods produced outside the country are excluded. GDP also includes only those goods and services that are produced for the ultimate user; intermediate products are excluded. For example, the chip that goes into a computer (an intermediate product) wouldn't count, albeit the finished computer would.

There are different economic systems adopted by different countries as per their requirements. However, it is important from the student’s prospect to investigate the importance of these systems. Therefore, they prefer to conduct comprehensive research on the different economic system but find it difficult to draft it professionally. For this reason, most of the learners prefer to hire professional dissertation writers or approach InstaDissertation. In addition to this, they can also buy custom dissertation even on urgent basis.

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