I don't understand the different types of economies.
I'll help you Timmy, come with me.
Why are we here?
I took you here to teel you what type of economy the US is. The US is a Market economy.
Now where are we?
We are in a traditional economy.
Timmy is having trouble doing his home work so he got some help from the teacher.
What type of economy is this place.
This is Iceland, it is a mixed economy.
The US is a market economy which means resources are owned and controlled by individuals. Competition determines prices and the quality of products. individual freedom is very important, it gives individuals the freedom to to make economic decisions.
A traditional economy has little to no technology, choices are determined by the environment, resources are based on inheritance, tradition and customs govern economic decisions, farming hunting, and gathering are done a lot in the same way as the generation before.