Reading. Read the text focusing on the main ideas

Read the text focusing on the main ideas.

There are three main questions any economy has to answer, whether it is a highly developed economy, the poorest of countries, or a small group of people.

· What is to be produced?

· How will it be produced?

· Who will get what is produced?

To answer these questions, different economic systems have been developed.

Traditional economies are dictated by tradition, customs, and religion. One of the features of this type of economy is very little economic growth. In traditional societies people use methods of production and distribution which were invented in the past and have become accepted ways of doing things.

A market economy is an economy in which the prices of goods and services are determined in a free price system. Trading and exchange of goods, services and information takes place in a free market. A market economy may, therefore, also be known as a free market economy. In the real world, market economies do not exist in pure form, as societies and governments regulate them to different degrees rather than allow self-regulation.

The opposite of a market economy is a planned or command economy, where the government decides what to produce, in what quantity, and to be sold at what price. A planned economy alleviates the use of private enterprises and allows the government to determine everything from distribution to pricing. Planned economies can provide stability, but they can also limit the growth and advancement of the country if the government does not allocate resources to the innovative enterprises.

A mixed economy is the one in which there exists a mixture of free enterprise and government control. In some areas of a mixed economy, the government may even have a monopoly. In a typical mixed economy, the government may run such things as the postal service, rail lines, libraries, and in some cases, the health care service. Even in industries which are not owned or run by the government, its influence is very noticeable in the form of taxes and regulations like wage controls.