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Economic System

Economic System. Economic Factors. The following factors constitute economic environment of business- Economic Systems- Types of Economies- Capitalist Economy

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Economic System

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  1. Economic System

  2. Economic Factors The following factors constitute economic environment of business- • Economic Systems- Types of Economies- • Capitalist Economy Capitalism is system of economic organization featured by the private ownership and use for the private profit of man made and nature made capital Ex- USA, China etc

  3. Economic Factors Characteristics of Capitalist Economy- • Freedom of Enterprise • Private ownership • Profit Motive • Consumer Sovereignty • Competition • Freedom of Contracts • Limited role of Govt.

  4. Economic Factors 2 Socialist Economy Socialism is an economic system where the means of production are either owned or managed by the state and where the investment structure, consumption, allocation of resources , distribution of income etc are regulated and directed by the state. Ex-Cuba & North Korea etc Characteristics of Socialist Economy- • Equitable distribution of Income • Government Ownership • Uniform Plan of Action

  5. Economic Factors • Mixed Economy- • In mixed economy there is policy of compromise between capitalist and socialist economic system. The main important characteristic of a mixed economy the existence of both private and public sectors. • Government and individuals share the decision making process • Government guides and regulates production of goods and services offered. • Protection to consumers and workers from unfair policies • Ex-India

  6. DIFFERENCE

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