Economy and types of Economy

Economy: A geographical area known as an Economy where some people earn their living by performing different economic activities. Like A teacher teaches, Doctor treats patients,to satisfy own needs.
        When people are less dependent to each other for their needs, is known as Simple Economy. But when the degree of dependence is high then it is called Complex Economy.
At present we are living in complex economy, because our needs are very vast.

Types of Economy
1-Centrally Planned Economy
2-Free or market Economy
3-Mixed Economy

1-Centrally planned Economy-These are those economy where maximum economic decisions are taken by some central authority or central government to keeping view in mind to maximize social welfare.Consumers are not sovereign in this economy.
Public sector dominates the economy.
Like Russia ,China(Before) Etc.

(Economic decisions are mainly What to produce ,how to produce and for whom to produce)

2-Market or Free Economy: These are those economy where maximum economic decisions are taken by private sector on the basis of free play of  market forces(demand & supply) to keeping view in mind to maximize profit. Consumers are sovereign in this economy.
Private sector dominates the economy.
Like USA,Germany etc.

3-Mixed Economy: These are those economy where economic decisions are taken on the basis of free play of  market forces(demand & supply) but regulated by government to keeping view in mind to maximize social welfare and profit. Consumers are sovereign in this economy.
Both private and public sector dominates the Economy.
Like:India etc.

For more detail: please view this video ,subscribe #vc official on youtube.



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