The Economic System

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There are three contrasting types of economic（http://www.watchcopiez.com/） systems in which individual economic units can interact with one another. The three basic ways may be described as the traditional system, the administered system and the market system.In a traditional society, production and consumption patterns are governed by tradition. A person's position within the economic system is fixed by his or her parentage, religion and custom. Transactions also take place on the basis of tradition. People belonging to a certain group or caste may have an obligation to care for other persons, provide them with food and shelter, care for their health, and provide for their education. In a traditional system, every decision is made on the basis of tradition alone. So progress may be difficult to achieve. A stagnant society may result.The administered system is an administrative control by some agency over all transactions. This agency will issue edicts or commands as to how much of each good and service should be produced, exchanged and consumed by each economic unit. Central planning may be one way of administering ...
... such an economy, which is called planned economy. In a system where planned economy is practiced, production, distribution and consumption are all controlled by the government. The central plan, drawn up by the government, shows the amounts of each commodity produced by the various firms and allocated to different households for consumption. This is an example of complete planning of production, exchange, and consumption for the whole economy.In a market system, individual economic units are free to interact with each other in the marketplace. It is possible to buy commodities from other economic units or sell commodities to them. In a market, transactions may take place via barter or money exchange. In a barter economy, real goods or concrete goods are traded against each other. A person can exchange an ax with another person for five sheep. Obviously, finding somebody who wants to trade an ax in exchange for five sheep may not always be an easy task. As a barter economy can lead to difficulties for the traders, the introduction of money as a medium of exchange makes transactions much easier. In the modern market economy, goods and services are bought or sold for money. A government refers to a group of people who are responsible for governing a country or an area at a particular time. The British Government is officially called Her Majesty's Government. It is the body of ministers responsible for the conduct of national affairs.When the general election is complete in Britain, the political party with an overall majority of members of the House of Commons forms the new government and begins its work. The chief executive of the Government is the Prime Minister. The Prime Minister is the Head of Government, who is appointed by the Sovereign. By tradition, the Prime Minister is also First Lord of the Treasury and Minister for the Civil Service. All the other ministers are appointed by the Sovereign on the recommendation of the Prime Minister.The British Government has the Cabinet as its centre. The Cabinet headed by the Prime Minister is the group of the most important government ministers responsible for government administration and policy. The members of the Cabinet are the Prime Minister's closest colleagues. They are personally selected by the Prime Minister and can be dismissed by him. They may include the holders of departments and non-departmental offices, such as the Chancellor of the Exchequer, who is often called the Chancellor; the Secretary of State for Home Under such an economic system, production, distribution and consumption are adjusted by market.Economy consists of three parts, that is, the primary sector, the secondary sector and the tertiary sector. The primary sector is the section of the economy concerned with the extraction of raw materials and the provision of agricultural crops and animal produce. The ^secondary sector, which is also called the industrial sector, is mainly concerned with the manufacture of goods. The primary sector and the secondary sector make up goods-producing sectors. They mainly contain agriculture, mining, manufacture and construction. In some countries, oil and gas extraction, quarrying, forestry, husbandry, fishing and hunting also belong to good-producing sectors.（http://www.watchescat.com/B-Replica-Omega-Watches-51.html）