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Economic Systems
Economic Systems are various methods by which countries have structured their economies. The earliest economic systems were based on simple bartering, whereas modern economics has nuances between laissez-faire and free market on one edge of the spectrum and communism or centrally-planned economies on the other.
787 Questions
The definition of capitalism is an economic system in which the means of production and distribution are privately or corporately owned and the operations are funded by profits. An example of capitalism is the prison system in the United States being operated by private companies.
What factors contributed to the collapse of command economies at the end of the 20th century?
Some factors that contributed to the collapse of command economies were the following:
- They were much less efficient at producing goods than Western free market economies.
- They were too focused on producing consumer goods instead of valuable new technologies
What does the law of comparative advantage say?
The Law of Comparative Advantage holds that each country or region can value its production of Good A in the value of Good B that cannot be produced when the resources are used to produce Good A AND the difference in these values between nations can create a competitive advantage for each region in producing the least expensive good and trading for the more expensive one.
For example, let's say that there is a country that could produce 1 computer or 10 banana milkshakes and another country that could produce 18 computers or 15 banana milkshakes. While the second country clearly has better production, the first country produces banana milkshakes far more cheaply (0.10 computers vs. 1.2 computers) As a result, if the first country makes the ten banana milkshakes and trades with the second country for computers at any value of 1 milkshake > 0.10 computers but < 1.2 computers, both countries will benefit.
What type of economic system does Russia have?
Russia is an industrialized Capitalist economy, with some state regulations, similar to most of Europe. The majority of business are in private hands. There are stock exchanges etc. But there is a strong control of business from outside the government. It is a mixed economy
What are the four basic economic systems around the world?
There are four types of economic systems: traditional economies, market economies, command economies, and mixed economies. these economic systems differ in how to answer the three basic questions: how to produce, what to produce and for whom to produce. In traditional economies, the three economic questions are decided mainly by social customs. In market economies, the economy is like capitalism in U.S and the economic questions are decided by individuals in the marketplace. In command economies, is like communism and the questions are decided by the government. In mixed economies, they are decided by a combination of market decisions making and government order. Many different combinations of these four kinds of economic systems are operating around the world today, with different degrees of success. Free-market and command (apex)
What is the 3 factors of economic systems?
Capitalism: free enterprise and private ownership Communism: high taxes, no private property Socialism: same as communism)
Which economic system suitable for Bangladesh and why?
In a mixed economy, the free market still has competition to improve the product as well as set prices, while the government can intervene to make sure that companies cannot harm customers by making sure that companies cannot do things like put lead in their products.
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What type of economic system does China have?
China once had a socialist, planned economy where the government (one party) controlled and owned all the means and methods of production. China currently has a very strange mix of socialist, capitalist, and communist ideas for their economy. It is unique in the world, and often really defies categorization.
While many capitalist ideas are in place, several core tenets of capitalism do not exist (sanctity of contracts, private property ownership). Likewise, far too many communist ideas are being ignored (allowing private collection of wealth, private ownership of external (foreign) investments allowed) for it to be considered Communist.
What kind of ecomomic system does Mexico have?
It is an "emerging market economy" with capitalistic tendencies.
How did Europe's economy change after the bubonic plauge wiped out so many people?
The 3/4 of the population of Europe died and in many places thousands died each day. When you have tradesmen, farmers, artists, soliders, and others gone that meant that there were vacancies in areas where people depended on someone who had a particular skill, provided foods, had a shop selling needed items. Houses were left vacant because the family died this meant whole cities were loosing population. On the other hand the death of people also allowed for others to move up in status and create a new life. This created a development of a middle class which added to the economy in the long run.
How does a mixed economic system affect demand and supply decisions by households and firms?
In a mixed economic system, both government and private entities play a role in making economic decisions, which influences demand and supply dynamics. Households and firms respond to market signals while also considering government interventions like taxes, subsidies, and regulations. This interplay can lead to altered prices and availability of goods, as the government may step in to correct market failures or promote social welfare. Consequently, households and firms must navigate both market conditions and regulatory frameworks when making demand and supply decisions.
