Economic Systems are institutional frameworks for solving basic economic problems. Types: Capitalist (market-driven, private ownership, price mechanism), Socialist (state-controlled, public ownership, central planning), Mixed (combination of market and planning). Capitalism: Relies on price signals and profit motive. Advantages: efficiency, innovation, consumer choice. Disadvantages: inequality, market failures, unemployment. Socialism: State controls production and distribution. Advantages: equity, reduced inequality. Disadvantages: inefficiency, lack of incentive, bureaucratic control. Mixed Economy: Combines market and state intervention. India is a mixed economy: public sector (PSUs), private sector, and government regulation. Role of government: social welfare, infrastructure, regulation. ICAI questions: Characteristics of each system, India's mixed economy model, advantages-disadvantages. Exam tip: Know specific features: capitalism uses "price mechanism," socialism uses "central planning," mixed economy uses "both." Mixed economy questions often mention India.