Name : Muhammad Julianto Fardan

ID
: 1610313610055
In Wikipedia, economic system is a system of production, resource allocation, and
distribution of goods and services within a society or a given geographic area. It includes the
combination of the varios instutions, agencies, entities, decision-making processes, and
pattern of consumption that comprise the economic structure of a given community.
Not all economic system are the same. As example, the economic system of the United States
is very different from the economic system of the Union of Soviet Socialist Republics.
The USA system is capitalistic. This economic system base on private ownership of the
means of production and their operation for profit. Characteristics central to capitalism
include private property, capital accumulation, wage labour, voluntary exchange, a price
system and competitive markets.
The essential characteristic of capitalism are that:
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The factors of production are privately owned

Economic transactions take place in markets, where buyers and sellers interact
Businesses and employess are free to pursue their own self-interest

The USSR system is communistic. In states which have a communistic system, most people
work in order to earn their living. They produce goods and services. Goods are either
produced on farms, like maize and milk or in factories, like cars and paper. Services are
provided by such thing as schools, hospital and shops. But their government limit private
property and private enterprise to a small area in the economy. The reduce to a minimum. The
Russian system is based on the principles of Karl Marx. Karl Marx was a political economist
who lived in the 19th century. Marx imagined world in which there would be no private
property at all. Communism in theory states that all property should belong to the state. In
practice, however, the citizens of states like the USSR are permitted to have personal effects.
Central planning by the State is an eseential part of the communist system. The central
authority decides on the quantity, quality, price and place of sale of any commodity

Source:
Unit 1, 3 and 5
Wikipedia.com
Thismatter.com: economic systems article