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What are the three types of economic systems used in the world today?

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Quick Answer

The three types of economic systems used in the world today are the market economy, planned economy and a mixed economy. Each has its own benefits and disadvantages.

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Governments play a minor role in a market economy, and consumers are the primary driving force behind a country's economy. The decisions of business are driven by supply and demand, and the government's only job is to insure the market is stable enough to support multiple economic activities.

A planned or command economy is totally run by the government. Everything from production to pricing is done by government officials, and it has little flexibility in the way it is run. For some businesses, this is an effective economy because there are no advertising or marketing costs to incur.

A mixed economy offers the best and worst of the market and planned economies. This type of economy is neither controlled solely by the government nor the consumer. There is a little flexibility when it comes to this type of economy, and a mixed economy contains both capitalist and socialist policies.

Countries such as the United States and France have market economies, while North Korea and Cuba have planned economies. Countries like Russia, Iceland and Sweden have mixed economies.

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