The economic system is an integral part of society's life

The economic system is a set of mechanisms and activities aimed at organizing and distributing all possible resources of society for consumption of goods. In other words, this concept can be designated as making decisions about what to produce, how and for whom.

In this connection, it is possible to characterize three main problems of the economic system. The first is related to the fact that it is necessary to implement the best development option, which will allow to produce the required quantity of goods and services in conditions of limited resources. The second is determined by the efficiency of production. This means that it is necessary to find out with what technologies and in what enterprises it will be most profitable to produce the required products. The third problem includes solutions based on the principles of distribution of goods released between different consumers.

The main signs of the economic system can be considered the method of settling economic relations, as well as the nature of ownership, which determines the means of production. In this regard, you can define several types of systems:

1. Traditional.

2. The team.

3. Market.

4. Mixed.

Let's consider the presented classification in more detail.

The traditional economic system is a structure based on subsistence economy and common property. The distribution of funds and resources, as well as their use, are carried out in accordance with established customs and traditions. This system can be characterized by small-scale production, conservatism, backward production technologies. Currently, it is observed in poorly developed countries.

The command economic system is a peculiar way of building the economic life of a society. Here the most significant means of production are at the mercy of the state, while the distribution of resources occurs centrally through planning.

A market economic system is one in which there is free competition, represented by freedom of choice, entrepreneurship, and also by a private form of ownership of resources. The regulatory process takes place practically without state intervention. Thus, the restoration of proportions and the maintenance of balance occur naturally.

A mixed economic system is a certain combination of the public and private sectors. State regulation ensures the protection of the social life of citizens, and the state itself takes a direct part in the provision of society with all sorts of social benefits.

The effectiveness of economic systems can be determined with the help of certain parameters, such as supply and demand, price and competition. Interaction between the first three in the economy is usually called "market mechanism". This indicator determines the coordination of actions between consumers and producers. In turn, competition helps to determine the degree of non-influence on the price of each participant in market relations.