There are three main types of economic systems in the world on the basis of distribution of goods and planning.
- Free Market Economy (Capitalist Economy) – Example : USA
- Planned Economy (Socialist Economy) – Example : Cuba, Soviet Union
- Mixed Economy (Features of both free market and planned economy) – Example : India
Free Market Economy (Capitalist Economy)
In a free market economy, production and distribution of goods and services is controlled by supply and demand. Government plays minimum role.
Planned Economy (Socialist Economy)
Government controls everything from production to distribution. Big companies are usually state owned.
Having features of both the economies.