Define the term "economic systems" and its relevance.

Economic systems are the means by which societies organise and distribute their resources, goods, and services.

In more detail, an economic system is a network of organisations used by a society to resolve the fundamental problem of scarcity. Scarcity is the basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, societies must decide what to produce, how to produce it, and who will consume it. These decisions are made through the economic system.

There are three main types of economic systems: traditional, command, and market. Traditional economies are based on customs, traditions, and beliefs, and often involve subsistence farming. Command economies are centrally planned and controlled by the government, with the government making all decisions about what to produce, how to produce it, and who gets the final product. Market economies are driven by supply and demand, with little or no government intervention.

Mixed economies, which combine elements of market and command economies, are the most common type of economic system in the world today. In these economies, the market determines the production of most goods and services, but the government plays a role in the allocation and distribution of resources.

The relevance of economic systems is significant. They determine how a society's resources are allocated, which in turn affects the standard of living for its citizens. The type of economic system a country employs can impact everything from the freedom of its citizens to the products available for consumption, and the amount of wealth that can be accumulated by individuals.

For example, in a command economy, the government has the power to dictate work roles and distribution of resources, which can limit individual freedoms and stifle innovation. On the other hand, a market economy allows for individual freedom and innovation, but can also lead to income inequality and a lack of basic services for the poor.

Understanding economic systems is crucial for any student of economics, as it provides the context in which economic activities occur and economic theories are applied. It helps to explain why different countries have different economic outcomes, and how economic policy can be used to improve economic performance.