Types of economic systems.

8.2

Market economy.

Economic system in which individual buying decisions in the marketplace together determine what, how, and for whom goods and services will be produced.

Command economy.

System in which a central planning authority, under the control of the country's government, owns most of the factors of production and determines what, how, and for whom goods and services will be produced.

Mixed economy.

Uses aspects of a market and a command economy to make decisions about what, how, and for whom goods and services will be produced.

Privatization.

Is the transfer of the authority to provide a good or service from a government to individuals or privately owned business.