type of economy
TRANSCRIPT
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Types of Economies
Developed
economy
Developing
economy
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Types of economic systems
CAPITALISTICSOCIALISTIC
MIXED
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CAPITALISTIC ECONOMY
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CAPITALISTIC ECONOMY SOCIALISTIC ECONOMY PRIVATE PROPERTY RIGHT TO
INHERITANCE FREEDOM OF
ENTERPRISE FREEDOM OF CHOICE
FOR CONSUMERS PRICE MECHANISM PROFIT MOTIVE SELF INTEREST LAISSEZ FAIRE STATE
SOCIALISTIC OWNERSHIP OF RESOURCES
ECONOMIC PLANNING SOCIAL WELFARE AS A
MOTIVATING FORCE ECONOMIC
EQUALITIES CLASSLESS SOCIETY ELIMINATION OF
COMPETITON
COMPARISON
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MERITS
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• SPIRIT OF ENTERPRISE
• INCENTIVE FOR TECHNOLOGICAL PROGRESS
• EFFICIENT USE OF RESOURCES
• INCENTIVE FOR CAPITAL FORMATION
• NEW CONSUMER GOODS
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• FLEXIBILTY AND ADAPTABILITY
• AUTOMATIC WORKING
• ECONOMIC FREEDOM
• INCREASE IN PRODUCTION AND STANDARD OF LIVING
• EXPANSION OF INTERNATIONAL TRADE
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DEMERITS
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• INEQUALITIES OF INCOME AND WEALTH
• CLASS STRUGGLE
• ECONOMIC INSTABILITY
• MISALLOCATION OF RESOURCES
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• WASTES OF CAPITALISTIC PRODUCTION
• EMERGENCE OF MONOPOLY POWER
• NEGLECTION OF SOCIAL WELFARE
• DOMINATION OF ECONOMIC VALUES
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SOCIALISTIC ECONOMY
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MIXED ECONOMY CO EXISTENCE OF PUBLIC AND
PRIVATE SECTORS CO EXISTENCE OF
CAPITALISTIC AND SOCIALISTIC FEATURES ECONOMIC PLANNING
PROMOTION OF SOCIAL WELFARE
PRICE MECHANISM PROFIT MOTIVE PRESERVATION OF FREEDOM REGULATION AND CONTROL OF
PRIVATE SECTOR
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MERITS
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• BETTER ALLOCATION OF RESOURCES
• FULLER UTILISATION OF RESOURCES
• ELIMINATION OF ECONOMIC INSTABILITY
• EQUITABLE DISTRIBUTION OF INCOME
• ELIMINATION OF CLASS STRUGGLE
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• PROVISION OF SOCIAL SECURITY
• INCREASE IN PRODUCTIVE EFFICIENCY
• RAPID ECONOMIC GROWTH
• PRODUCTION OF MORE USEFUL GOODS
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DEMERITS
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• DIFFICULTIES INVOLVED IN RATIONAL ALLOCATION OF RESOURCES
• LOSS OF EFFICIENCY
• LOSS OF INCENTIVES
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• LOSS OF CONSUMERS’ SOVEREIGNITY
• LOSS OF FREEDOM
• CONCENTRATION OF ECONOMIC AND POLITICAL POWER
• LOOPHOLES IN THE PLANNING PROCESS
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MIXED ECONOMY
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MERITS
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• PROPER ALLOCATION OF RESOURCES
• ECONOMIC STABILITY
• ADVANTAGES OF THE MARKET SYSTEM
• RAPID ECONOMIC DEVELOPMENT
• CHECK ON CONCENTRATION OF ECONOMIC POWER
• ECONOMIC AND POLITICAL FREEDOM
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DEMERITS
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• CONFLICT BETWEEN THE PUBLIC AND PRIVATE SECTORS
• SHORT-LIVED NATURE
• INEFFICIENT OPERATION
• POOR PERFORMANCE OF THE PUBLIC SECTORS
• EXCESSIVE REGULATIONS