An economic system is the result of individuals (consumers and producers), groups (firms, trade unions, political parties, families etc) and the government coming together and interacting in a legal and social society. The function of an economic system is to resolve the basic economic problem - scarcity which means that the resources are limited but wants are infinite. This distribution has three dimensions: * What is to be produced * How is it to be produced * For …
showed first 75 words of 1695 total

showed last 75 words of 1695 total
…is dictated by demand, the bigger the demand the bigger the supply and thus the price of the product is given. In a planned economy the governing body makes those decisions, supply is dictated by a governing body which tries to predict demand however this proves very difficult and it supplies goods to its wish and in a mixed economy supply of certain guds is dictated by a governing body and the others by demand.