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Economic System - Coggle Diagram
Economic System
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Definition of economy
A system where the production, consumption and distribution of goods and services takes place.
People provide their skills to produce goods and services and keep the economy running. In addition to this, resources (including land) and capital are needed for production in an economic system.
The production in an economic system is defined by the manufacturing of goods, the regulation of the system, and the distribution of the products.
The distributors of the output would be responsible for being the link between the producers and consumers
The decision-makers in the economy are households, who determine the demand for products and also provide labour for production. Businesses and the government are also decision makers and supply the goods and services (the extent of their power is determined by which economic system is established).
The means of production in an economic system include infrastructure and resources for production. The owners of the means of production are important as they define the type of economic system; for example, a capitalist system is defined by private ownership of means of production.
Workers are the people involved in production activity by providing their skills and they receive wages for their work.
Consumers pay to receive goods and services and in a capitalist society, for example, their demand are an incentive for producers to work.