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Advantages And Disadvantages Of Economic Systems

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An economy consists of a network of producers, suppliers, and consumers of goods and services in a local, regional or national community, however, with the aforementioned factors of an economy any respective country needs to determine an economic system. An economic system refers to the economic practices seen in the different types of economics systems. There are three types of economic systems which are the free-market, socialist and command economics. The free market system -also known as the capitalism -is an economic system where the government has little control over aspects such as ownership, products and services supplied and pricing. This means that in a capitalist society individuals own property and organisations, the goods and services …show more content…

Products and services supplied in a communistic society are determined by government, government decide what consumers need and further more decide what to produce. Each economic system has its advantages and disadvantages which help governments decides which economic system to use. Freedom to innovate is an advantage of the free market system which is positive but the system does have its flaws, one of them being that goods and services that are not profitable are not produced. Advantages in that of a socialist economy is that the ideally in an economic system like this all the needs of individuals will be met, meaning that education and health care would be free. The disadvantage in a socialist system is that the decision making process is slowed due to government and the bureaucratic nature of the system. Misuse of monopoly power is prevented by the command system, this is advantageous to the community, however, the system does not favour and respond to consumer …show more content…

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• Economic System – A nation’s system for allocating its resources among its citizens, both individuals and organizations – Factors of Production – Land – Labour – Capital – Entrepreneurs – Physical resources – Information resources There are basically four types of economic systems: 1) Market economy- An economic system in which individuals own and operate different factions of production. Examples: Free Enterprise & Capitalism Individual producers must figure out how to plan, organise and coordinate the production of products and services.

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Everyone is equal and gets the same thing. What if the access to health is poor and everyone would get cover. In an American communist government, there is no ambitions because everyone is equal and cannot expect to do something out of the ordinary. Their personal development would not grow in this political system. Also another positive way that In a communist society would beneficial , everyone contributes and works.

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Socialism contains a wide array of economic and social structures that are all generally defined by several core concepts. Stemming from the beliefs of Karl Marx, socialists value community control over the means of production, as well as free access to goods and services such as health care, education, employment, and many others. Most modern socialist states achieve this through strict regulation of the economy, as well as high taxation. The socialist model works by having every member of a community contribute to production, and having that production directly benefit everyone, cutting out profit entirely, as the only things produced are those that are necessary. I do not classify myself as a socialist, however, I do believe in many of the things that socialism proposes, in particular, the vast social freedoms and opportunities available through socialism.

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Many like to believe that it sparks innovation or that making people equal is a communist

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Communism builds on the idea that everyone is the same and should earn the same amount of money regardless of their profession. The most important with communism is that there should not be any class distinctions. China, Laos, Cuba and Vietnam

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Economic Systems: a system of the economy Interdependence: the degree to which members of the group are mutually dependent on the others. Individual Rights: rights of an individual Natural Rights:rights that people supposedly have under natural law Citizen Responsibilities: Free Enterprise:an economic system in which private business operates in competition and largely free of state control. steam engine: a heat engine that performs mechanical work using steam Invisible Hand:metaphor used by Adam Smith to describe unintended social benefits resulting from individual actions Industrialization:process in which a society or country (or world) transforms itself from a primarily agricultural society into one based on the manufacturing of goods and services. Inventiveness:creativity Imperialism:a policy of extending a country's power and influence through diplomacy or military

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Next is Capitalism. What is capitalism? Capitalism is “the economic and social system (and also the mode of production) in which the means of production are predominantly privately owned and operated for profit, and distribution and exchange is in a mainly market economy. It is usually considered to involve the right of individuals and corporations to trade (using money) in goods, services, labor and land.” Capitalism began to take control later on in the 1800’s.

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The economy is such a complex system in our current society. Over the years, we have gone though many economic recessions and inflations. The majority of people would consider United States economic states as a capital system but is infused with socialist attributes. Capitalism is an economic system in which privatization occurs through laws of the free market competition. Privatization is a process of private owners making a profit through trade.

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Communism In China A. Communism First, we would like to introduce about the communism. Communism is a socioeconomic system that advocate the common ownership and eliminate the private property rights to establish a society without social class system, country and government. In this system, the land and capital property own by the people. It advocate that the difference of the labour will not cause any unequal treatment and it oppose to the prerogative.

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This is a system where government and markets play a role in the economy. Mostly, the government plays a limited role. The government passes regulations and laws to correct market failures and promote social welfare. Socialism and Capitalism While a capitalist economy allows private sectors to own the means of production, socialism goes the opposite way.

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This results in prosperity, accelerated economic growth, and in progress of science and technology. Even though Capitalism naturally has certain divisions and may be of different kinds it is still less authoritative than centralized government as it is under Socialism. While the people are not commanded on how to use their wealth or power means that they will have more access to these two

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Socialists believe that it is not necessary to be in radical way overthrowing capitalist economies. In addition, socialists encourage both government establish and private manufacture, communists believe that all forms of production should come from state and everything belongs to the state. In brief, both communism and socialism have benefits and disadvantages. Neither communism nor socialism is perfect in terms of the form of government or economic system. Both find a route to make the country equality and reject class divisions and much more.

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Comparing Economic Systems There are three different economic systems Traditional, Market and Command. The survival of any society depends on its ability to provide food, clothing and shelter for its people. Due to the fact that these three societies face scarcity, which means “The state of being scarce or in short supply”, decisions concerning WHAT, HOW and FOR WHOM to produce must be made. However, another similarity is that all societies have an economy or an economy system which is an organized way of providing for the wants and needs of their people. This determines on the type of economy system they have.

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There are three main types of economic system that have already existed in the 20th century which are command economy, capitalist economy and mixed economy. However, we can relate these three economic systems with government, business and society because they are interrelated to each other. The first economic system is command economy where there is no private ownership of property and the government takes full responsibility for the economy. In this type of economic system, production is not undertaken for profit.

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INTRODUCTION An economic system is defined by the various processes of organizing and motivating labour, producing, distributing, and circulating of the resultant of human labour, such as merchandise and services, consumer durables , machines, tools, and other technology used as intake for hereafter production, and the infrastructure within and through which production, apportionment , and circulation occurs. These arrangements are intended by the political, cultural, and environmental conditions which they co-exist together (Gemma; 2014). In a command economic system or planned economy, the federal government controls the economy by deciding how the state would use and distribute resources. The government also regulates prices and wages

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