funtion of economic system. how to produce?

Answer 1

An economic system is a model that governs how a country would manage its factors of inputs (labor, capital, land). You can distinguish between two different systems: capitalism and socialism.

With Capitalism most economic decisions are left at the discretion of the individuals, entrepreneurs, and management managing larger corporations. The private sector owns or controls the majority of a nation's GDP. This is the U.S. We are really familiar how it works.

Socialism is different. In a socialist country the government owns or controls a very large share of the GDP. Many economic decisions are made by the federal government. Sweden is a good example of a socialist country.

If you need clarification, send me a message through "Answer." And, I'll amend my response accordingly.