Economic Systems

Present by Deepika Dogra Present to Mrs Surjeet Sodhi

Economic systems
By economic system we mean norms, principles, rules that govern economic relationship among people in an economy. The difference between an economy and economic system . An economy refers to an organization through which people earn their living . An economic system refers to those norms and rules or institutions which direct an economy

Capitalism
Origin and growth of capitalism dates back to the 18 th century after the industrial revolution in England and other nation of Europe . Capitalism refer to the economy system in which factor of production are privately owned and profit motive is the guiding principle of all production activities is called Capitalism.

Features of capitalism:
Private Property Competition Profit Motive Sovereignty Of Consumer

Merits Of capitalism
Proper use of Resources Efficient Production Increase in the standard of Living Automatic Rich Variety of Goods and Services

Demerits of Capitalism
Unequal Distribution of Wealth Class Struggle Exploitation of Labour Wasteful Competition Disregard of Public Welfare

Socialism
Many countries of the world like china, cuba etc have their economies based on socialism. Private socialism. Property stands abolished in these economies. Main economies. economies activities are regulated and controlled by the government in the interest of social well- being . well-

Features of Socialism
Social or Collective ownership Set Objectives Economic Planning Lack of Competition Social Welfare

Merits Of Socialism
Best Utilization of Economic Resources No Wasteful Advertisement Rapid and Balance Development Labour Equitable Distribution of Income

Demerits of Socialism
No Proper Basis of Cost Calculation End of Consumer s Sovereignty Difficulty in the implementation of Plans Lack of Freedom No importance to Personal Efficiency and Productivity

Mixed Economy
Form of economy which is partly privatized and partly public. It is the combination of both systems.

Features of Mixed Economic System

Co-existence of Private and Public Sectors Planned Economy and Government Control Profit Motive and Social Welfare

Merits of Mixed Economy

Economic Freedom and Capital Formation Competition and Efficient Production Efficient Allocation of Resources Freedom from Exploitation

Demerits of Mixed Economy

Uncertainty Poor Implementation Corruption Black Money Wastage