ECONOMIC SYSTEMS
In some modern societies, government plays a big role in answering the three basic questions. In pure command economies, a central authority directly or indirectly sets output targets, incomes, and prices. A laissez-faire economy is one in which individuals independently pursue their own self-interest, without any central direction or regulation, and ultimately determine all basic economic outcomes. A market is an institution through which buyers and sellers interact and engage in exchange. Some markets involve simple face-to-face exchange; others involve a complex series of transactions, often over great distances or through electronic means. 6 There are no purely planned economies and no pure laissez faire economies; all economies are mixed. Individual enterprise, independent choice, and relatively free markets exist in centrally planned economies; and there is significant government involvement in market economies. Free markets produce what people want, and comp...