ECONOMICS
ECONOMIC SYSTEMS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To provide a way for society to produce and distribute goods and services.
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To enable countries to maximize efficiency of resources
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To secure basic needs to the people
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To provide competition among various economic systems
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Detailed explanation-1: -The way scarce resources get distributed within an economy determines the type of economic system. There are four different types of Economic Systems; a traditional economy, a market economy, a command economy, and a mixed economy. Each type of economy has its own strengths and weaknesses.
Detailed explanation-2: -An economic system serves as a regulatory system for controlling different aspects of production and distribution, including capital, labor, land and other physical resources. In an economic system, there are many essential entities, agencies and decision-making authorities.
Detailed explanation-3: -A traditional economic system focuses exclusively on goods and services that are directly related to its beliefs and traditions. A command economic system is characterized by a dominant centralized power. A market economic system relies on free markets and does not allow any government involvement.
Detailed explanation-4: -In a capitalist system, economic growth increases prosperity and improves living standards but generates social and economic inequality, while in a socialist system the economy reduces social and economic inequality but generates less economic growth.