Process

First look at how economists categorize economies. A market economy is characterized by private ownership of the means of production (for example, farms and factories). Price and allocation decisions are determined by supply and demand. The United States, Hong Kong, and Germany are considered market economies.

A command economy is characterized by government (or central) control ownership of the means of production. The central authority sets the prices of goods and services and makes most allocation decisions. North Korea and Cuba are command (specifically communist) economies.

A developing economy is one which is not yet industrialized, but is developing. Chad, Ecuador, and Bangladesh are considered developing.

Source: Comparative Economic Systems
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