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I. Economic Systems II. Capitalist Ideology A. Basic Characteristics:
B. private property
C. markets and prices
D. role of self interest
E. freedom of enterprise and choice
F. competition = capitalism
G. limited role for government
III. The Market System at Work A. The Market and the 5Es 1. Economic Growtha. Define B. Summary: 1. The move toward capitalism has resulted in high rates of ECONOMIC GROWTH in many countries. Profits, private property, and freedom of enterprise and choice promote growth A. Introduction 1. The five fundamental questions must be answered by all economic systems. B. What will be produced? (Allocative Efficiency) 1. In order to be profitable, businesses must respond to consumers' (individuals, other businesses, and the government) wants and desires. C. How will the goods and services be produced? (Productive Efficiency) 1. The market system encourages and rewards those producers who are achieving least-cost production. D. Who will get the output? (Equity) 1. determined by how the income is distributed E. How will the system accommodate change? 1. Markets are dynamic - what is efficient today may not be efficient tomorrow as tastes, technology, and resource supplies change. F. How will the system promote progress? 1. The market system promotes technological improvements and capital accumulation (economic growth). What economic system is privately owned?Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.
In which type of economic system are all productive activities privately owned?Capitalism. Capitalism is an economic system in which the means of production are privately owned. By means of production, we mean everything—land, tools, technology, and so forth—that is needed to produce goods and services.
What type of economic system is described when the government owns major industries and private individuals manage small industries?Mixed economic systems are not laissez-faire systems, because the government is involved in planning the use of some resources and can exert control over businesses in the private sector. Governments may seek to redistribute wealth by taxing the private sector and by using funds from taxes to promote social objectives.
Which economic system emphasizes the private ownership of most factors of production?Capitalism is based on private ownership of resources and means of production, and individual choices in a free market. This is in contrast to socialism. According to socialist philosophy, these features of capitalism lead to inequalities in wealth and hence power, and the exploitation of workers.
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