Economic Systems
Definition
Economic systems refer to the way a society organizes and manages its resources, production, distribution, and consumption of goods and services.
Analogy
Think of economic systems like a recipe for baking a cake. Just as different recipes use different ingredients and techniques to create a delicious cake, different economic systems use various methods to produce and distribute goods.
Related terms
Mercantilism: Mercantilism is an economic system where nations aim to accumulate wealth through trade by exporting more than they import.
Capitalism: Capitalism is an economic system based on private ownership of resources and businesses with the goal of profit generation.
Feudalism: Feudalism was the dominant economic system in medieval Europe, characterized by a hierarchical social structure and land-based economy.
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