Traditional Economy A traditional economic system is a system whose past experiences, which were handed down from generation

n to generation are used as bases for economic decisions. Production is carried on through methods used by their forefathers and therefore very primitive. Traditional economy is benefited by the family who is tough by their Ancestors way of producing the products. Capitalism Capitalism is an economic system in which individuals or companies own and distribute resources or goods for financial gain. When political entities attempt to control the economic system by restricting resources, markets, sale of goods or establishing price controls, the characteristics of capitalism change. "Free-market capitalism" is the purest form of this economic system; investments and risks are weighed against the competition and are the sole decisions of individuals and companies. Capitalism requires a competitive market with many sellers offering comparable goods and services to potential buyers. Competition is a self-regulator of pricing for both buyers and sellers, driving companies to develop better products for consumer appeal. Capitalism is in itself nondiscriminatory. A few individuals may avoid businesses because of race, religion or social status, but the greater marketplace only judges on the quality of services or goods for the price. The competitive market allows anybody to increase her financial status if she will meet the needs of other individuals. Mixed Economy A mixed economy is a combination of traditional and command economy which is controlled by the Private and Public institutions exercise economic control. The private sector works through the markets mechanism and minor industries such as production and distribution of candies and cigarettes belong to them. While the public or government institution works through regulatory commands and it owns and manages major industries such as transportation, electrification, and others. Depending on the ratio of capitalistic elements to socialist or mercantile elements, there are many freedoms in a mixed economy. People may go into business for themselves, decide what they will produce or sell, and set their own prices. Business owners and merchants pay taxes, but they reap the benefits of those taxes through social programs, roads and other infrastructure elements, and other government services.

Socialism socialism, social and economic doctrine that calls for public rather than private ownership or control of property and natural resources. According to the socialist view, individuals do not live or work in isolation but live in cooperation with one another. Furthermore, everything that people produce is in some sense a social product, and everyone who contributes to the production of a good is entitled to a share in it. Society as a whole, therefore, should own or at least control property for the benefit of all its members. Socialism produced not because of or for the profit or the money owned by the product, but because of the needs of the masses. Communism The economic system of communism puts all planning of the economy in the hands of the government. A communist society distributes ownership of property evenly among every member. Because of the immense power of the state, small business is almost nonexistent in a communist society. Although attempts have been made to create communist societies, true communism has essentially died. One of the fundamental problems with communism is the knowledge problem, which describes how, without a price system, central planners cannot accurately determine what goods and services should be produced or in what quantities. Useless surpluses and devastating shortages are the result. Communism is often considered to be a twentieth century political experiment that officially failed in the late 1980s and early 1990s with the fall of the Berlin Wall and the collapse of the Soviet Union.