Functions of an Economic System:

All economics perform the following functions

(i) Allocation of Resources: Every economy has to decide what and how much good and services to produce at any given time.

(ii) Organisation of Production: Every economic system must decide what alternative techniques of production are more suitanle to its circumstances.

(iii) Distribution of Goods and Services: How the goods are shared among people is determined in every economic system.

(iv) Economic Growth and Development: The mechanisms to grow the economy and raise average living standard at determined in each economy.

(v) Economic Stability: Every economic system had mechanisms designed to control fluctuations in the level of economic activity eg. Using fiscal and monetary policies.