Question

Describe each economic system

Answer 1

P. Economic SystemsRELATED 
 
WORDSThe three systems generally considered the major economic systems in the world are: Capitalism, Socialism, and Communism.CAPITALISM has certain characteristics:Private ownership of property and of the means of production is the rule.Individuals or groups of individuals can invest money in businesses or start their own businesses (free enterprise).Owners and investors take risks, but make and keep profits.The type, quantity and price of goods and services produced are determined in the marketplace.Hard work, the desire to compete, and willingness to try new ideas are important for success.Government is to avoid interfering in the economy.SOCIALISM has certain characteristics:Public (government) ownership of the major means of production and private ownership of the rest exist together.Individuals or groups of individuals can invest money in certain businesses or start certain types of businesses.Government provides for the general welfare of its people.Government plays an active role in the economy wherever and whenever necessary to ensure economic strength and social justice.COMMUNISM has certain characteristics:Public (government) ownership of the means of production is the rule.All businesses are owned by the government and are to be operated for the benefit of the people.People must cooperate and do their fair share of work.The type, quantity and price of goods and services produced are determined by the government.All people are equal and provided with what they need.Eventually, there will be no social classes and government will not be necessary.The three major economic systems in the world, then, are capitalism, socialism, and communism. The United States practices its form of capitalism. Most of the nations in the world practice some form of socialism. Although no government truly practices communism, some nations describe their economy as communist because that is their ultimate goal. Pure capitalism, socialism, and communism exist only in theory.