Advantages And Disadvantages Of Economic Systems

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1. Introduction
A systematized approach in which a government or nation distributes its resources and apportions goods and services in the national community. The economic system can consist of the different ways that the workforce is organized and how it is rewarded or motivated. In addition it would include the whole process of producing and allocating goods.
In these systems there are elementary concepts that a person should think about and consider which include the political circumstance, tradition, and even the environment production of these goods or services.
2. Economic Systems
a. Traditional economy
A traditional economy is a system whereby customs, tradition, inheritance and belief systems establish how to retort the three economic questions. In this system only a limited amount of specialization and diminutive trade occurs. People tend to live in family groups, and these families produce most of their own food, make their own houses, collect their own fuel (coal, fire wood etc.) and contribute to their own leisure activities.
Examples of traditional economies
• Australian aborigines
• The Mbuti in Central Africa
• The Inuit of Northern Canada
Advantages
• There’s little to no hesitation/uncertainty.
• Everyone knows what role they play in the society.
• Life is general, constant, predictable and constant.
Disadvantages
• Innovation is discouraged.
• Lower standards of living.
• Need of development.

b. Market Economy
The forces of demand and supply, without any government interference, determine how resources are allocated; production, consumption, price levels and competition are made by collective actions of individuals or organizations in quest of their own advantage. In the market system the method of coordin...

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...f the mixed economy is a suitable system for our current economic conditions.
South Africa’s economic growth improved enormously with the shift to a democracy and has been reasonably stable throughout the democratic era with growth being at 3.2% a year on average from 1994 to 2012.this has resulted in the transformation of the economy from the GDP of $136 billion in 1994 to $384 billion in the year 2012. This was a report from (The Economic Society of South African) don over a period of 20 years of country’s economy since the democracy began, from page 86 of the 193 paged documents, based on data given by the World Bank’s development indicators released in February 2014.
It is clear that South Africa as an economy has improved over the years under the mixed economic system, judging by the facts produced by the GDP and the development the countries undergone.

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