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Economic system Meaning: Definition, Examples, and Translations

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economic system

[ˌiː.kəˈnɑː.mɪk ˈsɪs.təm ]

Definitions

Context #1 | Noun

business

An economic system is a system of production, resource allocation, exchange, and distribution of goods and services in a society or a given geographic area.

Synonyms

economic order, economic structure.

Which Synonym Should You Choose?

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Word Description / Examples
economic system

Refers to the comprehensive and organized way by which a country or region manages its economic activities, including production, distribution, and consumption of goods and services.

  • The capitalist economic system promotes private ownership and free markets
economic order

Describes the arrangement or organization of economic relationships and institutions in a particular period or society, emphasizing the stability and functioning of these elements.

  • After the war, a new economic order emerged, focusing on global trade and cooperation
economic structure

Refers to the specific composition and organization of an economy, including the division of industries, sectors, and their relative contributions to the GDP.

  • The economic structure of the region is heavily reliant on agriculture and manufacturing

Examples of usage

  • The United States operates on a capitalist economic system.
  • In a socialist economic system, the government owns and controls the means of production.
Context #2 | Noun

finance

An economic system refers to the structure of production, distribution, and consumption of goods and services within an economy.

Synonyms

economic framework, economic model.

Which Synonym Should You Choose?

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Word Description / Examples
economic system

Used when talking about the structure and organization of the economy in a country or region.

  • The economic system of the country is based on capitalism.
  • Different countries have different economic systems, such as socialism or mixed economies.
economic model

Used to describe theoretical constructs or representations that explain and predict economic phenomena.

  • The government is using an economic model to forecast the impact of the new tax policy.
  • Researchers developed an economic model to understand the relationship between inflation and unemployment.
economic framework

Refers to the underlying structure or set of guidelines that influence and shape economic policies and practices.

  • The new economic framework aims to promote sustainable growth.
  • An effective economic framework is crucial for the stability of financial markets.

Examples of usage

  • The free market economic system allows for competition and consumer choice.
  • The planned economic system involves central control over production and distribution.

Translations

To see the translation, please select a language from the options available.

Interesting Facts

Historical Origins

  • The term 'economic system' gained prominence during the 19th century as societies began to industrialize.
  • Different systems evolved worldwide, influenced by cultures, wars, and discoveries, resulting in capitalism, socialism, and mixed economies.
  • The concept of economics dates back to ancient civilizations where trade and resource management were crucial for survival.

Types of Economic Systems

  • Capitalism emphasizes private ownership and free markets, allowing individuals to pursue profits.
  • Socialism promotes public or collective ownership of resources, aiming for equal distribution among citizens.
  • Mixed economies combine elements of both capitalism and socialism to balance efficiency with social welfare.

Modern Implications

  • Globalization has led to interconnected economies, where actions in one country can impact markets worldwide.
  • Technology is reshaping economic systems, with digital currencies and online services changing how transactions occur.
  • Debates continue about which economic system is best for addressing inequality, environmental issues, and sustainability.

Pop Culture

  • Movies often portray economic systems through narratives about wealth, greed, and innovation (e.g., 'The Wolf of Wall Street').
  • Many video games incorporate economic systems, allowing players to build and manage virtual economies, creating real-world parallels.
  • Books like 'Atlas Shrugged' discuss the intricacies and moral implications of these systems, influencing readers' views on society.

Psychology

  • Studies show that economic systems can influence behavior, shaping how individuals value cooperation versus competition.
  • Economic systems affect mental health; for example, systems with more security and support often correlate with higher life satisfaction.
  • The perception of fairness within an economic system can significantly impact social trust and stability.

Origin of 'economic system'

The concept of economic systems has been studied and debated by economists and scholars for centuries. Different economic systems have evolved over time, from traditional and command economies to market and mixed economies. The idea of an economic system is central to understanding how societies organize and allocate resources to meet the needs and wants of their citizens. The study of economic systems continues to be a fundamental aspect of economics and social sciences.