Market Economy

• Market economies, also known as capitalism, make a direct connection to consumer purchases. The capitalism of today focuses on setting prices in addition to placing a value on technology. This system requires no planning beforehand to initiate. Whether national or local, the government is not a prominent factor in this type of economy. Their only position is to make sure the economy is stable enough to do economic business. The market decides a plan through making guesses as to what the consumer will want and the supply of items.
  
  

Planned Economy

• In a planned economy, all decisions that involve the economy are made by the government. These decisions include the distribution of items, production of items and prices. The market has no effect on the economy nor does the system change quickly to consumer needs. It is rigidly slow in recognizing changes as part of supply and demand. Available resources are in use for production first.
  
  

Mixed Economy

• Mixed economies take into consideration both the market economic system and the planned economic system to create a unique combination. They are a blend of capitalism with socialism. Neither business nor the government controls all areas, leaving decisions to be a joint effort. This type of system is good for countries that have many political beliefs. It is important because the health of an economy with a wide range of opinions must have balance.
  
  

Factors Influencing Each System

• Several factors affect both how the system works as well as its overall success. As economic environments change, an economy must be able to change with it. Consider the level of economic development a country may have. To find the level of economic development, look at any changes in growth of the income of consumers and the Gross National Product. The occupations, race, income, values and beliefs are all social effects that influence purchasing needs for a consumer. Natural environment is also a factor. This includes subjects such as population size or climate. Deliberate on government involvement if problems arise in the future as well as the level at which the act of intervention would take place.