What are the four functions of an economic system? Contrast the way in which the market economy and planned economy attempt to solve the economic problem.
Date Submitted: 09/10/2006 00:03:24
Category: / Social Sciences / Economics
Length: 4 pages (1000 words)
Category: / Social Sciences / Economics
Length: 4 pages (1000 words)
The four functions of an economic system are what to produce, how much to produce, how to produce and whom to distribute to.
The market economy is one that is controlled by the people and there is little government intervention. It is also known as a free enterprise economy.
The planned economy is one that is controlled by the government and there is a lot of government intervention into the way in which the economy …
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…to produce and who to produce to
In a planned economy everything is controlled by the government, in a market economy the people or market controls everything. There is a mixture of both which can be likened to Australia and this is called a market economy.
In conclusion, although these two different economies have very different strategies, they both work towards the ultimate goal of trying to solve mans unlimited wants with relatively scarce resources.
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