Angela Adams Byland Mid-term Essay February 11, 2009 The Three Types of Economic Systems When it comes to an economy, there are three basic economic questions that each must answer. When I think of economic questions, I think of more complicated stuff like "How do we control inflation?", "How do we lower unemployment?", and "How do we keep the economy flourishing?" but these aren't the three basic economic questions. The real ones are: What will be produced with our resources? How will these goods be produced? For whom will we produce these goods? In former Soviet Union, for example, communist officials set prices for staples such as milk, bread, eggs, and other essential goods. Also stated in the text, the ultimate goal of central planning is to achieve a wide range of political, social, and economic objectives by taking complete control over production and distribution of a nation’s resources. Other examples of countries that use a centrally planned economy or command economy are: Cuba, China, and any communist country or dictatorship. A mixed economy is a system in which land, factories, and other economic resources are rather equally split between private and government ownership. In a mixed economy, as stated in the text, the government owns fewer economic resources than does the government in a centrally planned economy. Yet in a mixed economy, the government tends to control the economic sectors that it considers important to national security and long-term stability. Such sectors usually include iron and steel manufacturing (for building military equipment), oil and gas production (to guarantee continued manufacturing and availability), and automobile manufacturing (to guarantee employment for a large portion of the workforce). Mixed economies are found all around the world: Denmark, France, Germany, Norway, Spain, and Sweden in Western Europe; India, Indonesia, Malaysia, Pakistan, and South Korea in Asia; Argentina in Latin America; and South...