Facts on the Economic System

by Jason Chavis; Updated September 26, 2017
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Economic systems use a variety of methods to measure their success and stability. Each economic system around the world is generally based on individual nations or collective groups of nations and highly influenced by the type of control the governments place on markets.

Features

The basic measurement of a particular economic system is known as gross domestic product. It comprises the market value of all goods and services produced by a nation within a year's time.

Function

The production, distribution and consumption of goods and services throughout the economy is known as the economic system. This system depends on the principles established by a nation's government.

Significance

One theory to analyze an economic system is known as the purchasing power parity. This determines the exchange rate of two separate currencies in an effort to find their purchasing powers.

Types

Different types of economic systems are based on the idea of intervention from a government on the market. Governments establish different levels of rules and regulations by which the economy operates. For example, a communist economy generally controls most aspects of the market, but a full free market does not.

Considerations

An economic system is judged in part by the amount of individual consumption within the market. This can be identified most readily by the gross national income per capita. By determining this amount, a standard of living measurement for individuals can be identified.

About the Author

Jason Chavis has been a professional freelance writer since 1998. He is the author of four books, two movies and a play as well as numerous articles for "Scientific American," The History Channel, City Pages and "The Onion." In 1996, Chavis won the award for "best science fiction/fantasy" from the River Valley Writer’s Conference.

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