key term - Economic system

Definition

An economic system is the structure and methods by which a society decides on the allocation of resources and goods, including how production, distribution, and consumption are managed. It encompasses various models such as capitalism, socialism, and mixed economies, each with distinct policies on government intervention and market freedom.

Related terms

Capitalism:

A system where trade, industries, and the means of production are largely or entirely privately owned and operated for profit.

Socialism:

An economic system where the means of production are owned or regulated by the community as a whole, with an emphasis on equal distribution of wealth.

Mixed Economy:

An economy that incorporates elements of both capitalism and socialism, allowing for private enterprise alongside substantial government intervention and public services.