ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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It generates wealth.
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People have to adjust to incentives.
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There is an increase in GDP per capita.
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All of the above.
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Detailed explanation-1: -What are the main problems for a nation transitioning to capitalism? They face instabilities, they haven’t developed automatic stabilizers, and haven’t created social welfare nets.
Detailed explanation-2: -Capitalism has been criticized for establishing power in the hands of a minority capitalist class that exists through the exploitation of a working class majority; for prioritizing profit over social good, natural resources and the environment; and for being an engine of inequality and economic instabilities.
Detailed explanation-3: -There are many important problems in the transition process from a planned to a market economy: change of the constitution and of political and social institutions, freeing of prices, privatization, establishing a banking system, fighting inflation and others.
Detailed explanation-4: -Challenges When Transitioning To A Market Economy However, these countries did face challenges in transitioning to a market economy, including: Poor existing infrastructure. Erratic trade imbalances. Leery foreign investment.