a traditional economic system focuses exclusively on goods and services that are directly related to its beliefs, customs, and traditions. it relies heavily on individuals and doesn’t usually show a significant degree of specialization and division of labor. in other words, traditional economic systems are the most basic and ancient type of economies.
large parts of the world still qualify as traditional economies, primarily rural areas of second- or third-world countries, where most economic activity revolves around farming and other traditional activities. these economies often suffer from a lack of resources. either because those resources don’t naturally occur in the region or because other, more powerful economies restrict access to them.
hence, traditional economies are usually not capable of generating the same amount of output or surplus that other types of economies can produce. however, the relatively primitive processes are often much more sustainable, and the low output results in much less waste than we see in any command, market, or mixed economy.
command economic system
a command economic system is characterized by a dominant centralized power (usually the government) that controls a large part of all economic activity. this type of economy is most commonly found in communist countries. it is sometimes also referred to as a planned economic system because most production decisions are made by the government (i.e., planned), and there is no free market at play.
economies that have access to large amounts of valuable resources are especially prone to establish a command economic system. in those cases, the government steps in to regulate the resources and most processes surrounding them. in practice, the centralized control aspect usually only covers the most valuable resources within the economy (e.g., oil, gold). other parts, such as agriculture are often left to be regulated by the general population.
a command economic system can work well in theory, as long as the government uses its power in the best interest of society. however, this is, unfortunately, not always the case. in addition to that, command economies are less flexible than the other systems and react slower to changes, because of their centralized nature.
Subject EconomicsElements of Accounting Equation
There are three elements of accounting equation namely,AssetsLiabilitiesEquity
In accounting equation,Assets = Liabilities + Equity1. ASSETS
In accounting, assets are any resources with value owned by the business, company, entity or person. Assets have two categories, these are:Current AssetsNon-current Assets
-these are assets that can be readily convertible to cash in a normal operating cycle of a business.
Some Examples of Current AssetsCash and cash equivalentsAccounts ExpensesMarketable Securities
-these are long-term assets or long-term investments that have a longer useful life that is usually more than 1 year. Not easily convertible to cash.
Some Examples of Non-Current AssetsLandProperty, Plant and EquipmentTrademarksLong-term InvestmentsGoodwill
All fixed assets and intangible assets fall under the category of non-current assets.2. LIABILITIES
In accounting, liabilities are the payables or debts of a business to settle. Liabilities have two main categories:
-these are payables or debts which are short-term payables that needs to be paid or settled by the business within a year.
Some Examples of Current LiabilitiesAccounts PayableInterest PayableIncome Tax PayableAccrued ExpensesShort-term loans
-these are payables or obligations that are long-term liabilities that can be settle after a year or more than a year.
Some Examples of Non-Current LiabilitiesBonds PayableLong-term Notes PayableDeferred Tax LiabilitiesMortgage Payable3. EQUITY
In accounting and finance, equity refers to shareholders/ owners' equity. This is the net worth value attributable to the owners of a business. This is the difference between the value of the assets of the business and the value of the liabilities.
Shareholders Equity Components
On the balance sheet, under equity components are:Common StockPreferred StockRetained EarningsAdditional paid-up capital-common stockAdditional paid-up capital- preferred stockTreasury sharesNon-controlling interest (also called minority interest)Foreign currency translation reserve
For further details about equity
Further topics about assets and liabilities
What is the opposite of assets
to create an electricity
Accordingly, the Mckinsey Global Institute reported that internet speed, particularly faster connections, enable economic growth that leads to more jobs and wealth. This research was made on 13 countries that account for over 70 percent of the global gross domestic product (GDP).