Economy : Definition and Types

Monday, March 27, 2017

The Production, distribution and consumption of of goods and services by different economic agents in a given geographical area is termed as an Economy. The economic agents can be individual, businesses, organizations or government.

Types of Economy 
  1. Traditional Economy :- The economy in which all economic activities(Production, Distribution and Consumption) are controlled by the customs, tradition and beliefs of the society is called as Traditional Economy.
  2. Centrally Planned Economy :- In this type of economy major policies related to production, distribution and consumption are decided and controlled by the government. 
  3. Mixed Economy :- This is an economy in which some economic activities are controlled by market itself and some are decided by the government. India is the best example of Mixed Economy.
  4. Capital/Market Economy :- In the Capital or Market Economy all economic activities are controlled by the market itself, the has very low or no control over economic activities. The best example of Capital or Market Economy is the United States of America.
  5. Socialist Economy :- The economy in which all economic activities are decided and managed by the government is known as Socialist Economy. The Soviet Union of the major part of 20th century is a good example of Socialist Economy.
  6. Welfare Economy :- The name is clear to define it, this type of economy is only for the welfare of the people living in that economy. Amartya Sen is awarded Nobel prize in 1998 for his works on Welfare Economy.
  7. Green Economy :- This is quite a new term, this is a type of economy in which all the economic activities are decided and controlled keeping view of environment and ecology of the Economy to develop a healthy economy.
If you are not satisfied than you can watch video tutorial.