An economy is a social system where individuals and organizations produce, consume and exchange all types of goods and services. The production, consumption, and distribution of goods and services rely on the needs of the habitants.
There are three principal types of economy:
- Free market economies (prices are determined by supply and demand),
- Command economies (the government decides what is produced and may use non-price formats)
- Mixed economies (it allows a compromise between the two extremes of free markets and central planning).
