Economic systems

Traditional Economy

An economy based on customs, traditions, and beliefs, where people often trade goods and services without money.

Economic System

The way a society organizes production, distribution, and consumption of goods and services.

Command economy

An economy where the government makes all major decisions about production and pricing. (dictatorship)

Socialism

An economic system where the government owns key industries and aims to distribute wealth more equally.

Market

Any place or system where buyers and sellers interact to exchange goods, services, or resources.

Market economy

An economy driven by individual choices and voluntary exchanges, with little government interference.

Capitalism

An economic system where private individuals own businesses and compete to earn profits

Mixed economy

A blend of market and command systems, where both private enterprise and government play roles.

Communism

An economic and political system where all property is publicly owned, and the government controls all production.

Household

A group of people who live together and make economic decisions as consumers.

Firm

A business organization that produces goods or services to earn profit

Profit

A business organization that produces goods or services to earn profit

Incentive

A reward or punishment that motivates people to act in certain ways.

Competition

The rivalry between businesses to attract customers and improve products or prices.

Laissez-faire

The idea that government should stay out of economic affairs as much as possible.

private property

The right of individuals to own and control assets like land, homes, and businesses.

free enterprise

A system where individuals are free to start businesses and compete in the market.

economic equity

The fairness with which wealth, opportunities, and resources are shared in a society.

standard of living

The level of wealth, comfort, and access to goods and services people enjoy.

economic growth

An increase in the amount of goods and services produced in an economy over time.