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Japan – China ? Theocratic law (based on religious precepts) – Sudan – Pakistan Types of economic systems Market Economy ? Market Economy: resources are primarily owned and controlled by the private sector, not the public sector – The key factors are consumer sovereignty that is the right of consumers to decide what to buy and freedom for pany to operation in the market. – Prices are determined by supply and demand 23 Structure of Flows in a Modern Exchange Economy Command Economy ? Command Economy (Centrally Planned Economy): all dimensions of economic activity, including pricing and production decisions, are determined by a central government plan – Government owns and controls all resources – Prices are determined by government Mixed Economy ? Mixed Economy: Some degree of government ownership and control ? No economy is purely market or mand ? Most mand economies are moving towards a market economy 26 Spread of market based systems Reforms and Economic Progress 28 Social structure ? Two dimensions – Th