Tuesday, October 25, 2011
- factors of production and distribution are owned and managed by private individuals or corporations. Similar terms like market economy, free enterprise economy, or laissez faire economy. Laissez faire means no government intervention in economic affairs. The essential characteristics of capitalism are private property, economic freedom, free competition and profit motive.
- Exactly opposite of capitalism. The factors of production and distribution are owned and management by the state. It is also called a command economy or classless society. The essential of communism are no private property, no free competition (the government is the only seller) no economic freedoms, no profit motive, presence of central planning.
- It is a combination of capitalism and communism. the major and strategic industries are owned and managed by the state while the minor industries belong to the private-sector. Examples of major industries are transportation, electrification, mining, etc. Minor industries are candies, cakes, toys, etc.
How to judge an Economic System
1. Abundace-this refers to goods and services that individual members of society have received.
2. Growth-measurable in terms of the number of buildings, houses, schools, cars, hospitals, factories or machines made in a given year. However, destructive fruits like pollution,drug abuse, and sex crimes.
3. Stability-this refers to the absence of inflation and unemployment.
4. Security-It depends on economic stability.
5. Efficiency-it means productivity.
6. Justice and Equity-Fair distribution of wealth, no big gap between the poor and the rich.
7. Economic freedom-freedom to choose his food, style of houses, appliances, recreation, education, etc.
Goal of Economics
- Economic Growth
- Full Employment
- Price stability
- Economic freedom
- Equitable distribution of wealth and income
- Economic Security
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