Classroom 08:54 97% In-Class Assignment-2-Chapter-2- Economic Systems 2.1 Economic Systems Evento esterno wy produced whetstown, and women proge Beroemdheton protes de de comme Economic consected by the way yondered dachung recomandare pomenis way we wewe en condicherry Torty on et le the magnetoformed and we Page-2: In-Class Assignment-2 Laissez-Faire Capitalism besserere capitalisme contheguem en prometno private property on the end ty tnd I aboun vin rt nhiuren The Finch for the portering.com ire testion at the tenths stars They are Tuntutan locate con il tetto con were completed the should be laurowe on where people them? Portfoy vermeyede tegen som er known that we are many which ncluding indoney and dining and income Thus, you should stop by proper como-hached by the creation in the conomy Page-3: In-Class Assignment-2 The Command System The people camesemand systematic rem din comercred by the go The conditions Unterhemden composition and and the word on The power om bmw protecting to reception para docentes to be condotto producing the wall decided to onders of their condomer Becommandmed por 102 mm docs.google.com Page-3: In-Class Assignment-2 The Command System The polar opposite of laissez-faire capitalism is the command system which government owns most property and in which economic decisions are made according to a central economic plan created and endorsed by the government The command system is also known as com or communion Under the command system, a central planeing board appointed by the government makes all major decisions concering the use of resources, the composition and distribution of output, and the organization of production. The most of the business firms, which produce according to government directives. The central planning board armies production goals for each enterprise and specifies the amount of resources to be noted to each one that it can reach production goals The division of output between capital and consumer goods santrally decided and capital goods allocated among industries on the basis of the central planning board's long-term pritis Pure command economy would rely exclusively on a central plan 10 locate the government-owned property resources But in reality, even the prominent command economy-the Soviet Union-tate some private ownership and incorporated some markets before its collapse in 1990 Recent reforms in Russia and most of the eastem Europeanations have to one degree or another transformed their command economies capitalistic market rented systems China's reforms have not gone as far but they have greatly reduced the reliance central planning Although of resources and capital in China is still extensive the nation has increasingly relied on free market to organies and coordinate its economy North Korea and Cubs are the last prominent romaning examples of largely central panned economies. Other countries using mainly the command system include Turkmenistan Laos, Belarus Myanmar and tran Later in this chapter we will explore the main reasons for the generales of command systems Page-4: In-Class Assignment-2 The Market System The vast majority of the world's economies use the market system which is also notas capitaloramideconomy The market system is characterized by a mature of centralized government economic initiatives and decentralized actions taken by individuals and firms. The precise mature varies from country to country, but in each case the system for the private ownership of resources, and the use of markets and prices to coordinate and direct economic activity In the market system. Individuals and businesses seek to achieve their economic goals through their own decisions regarding work consumption, and production. The system allows for the private ownership of capital communicates through prices and coordinates economic activity through marketplaces where buyers and sellers come together to buy and sell goods. services, and resources Participants act in their own self-everest and goods and services are produced and resources se supplied by whoever is willing and able to do so. The result is competition among independently acting buyers and sellers each proud and resource, and an economic system in which decision making is widely dispersed The market system also offers high potential monetary rewards that create powerful incentives for existing fast innovate and for entrepreneurs to pioneer new products and processes despite the facilisis involved and despite most innovations failing to catch on with consumers In the capitalism practiced in Canada and most other countries, the government plays a substantial role in the economy it not only provides the rules for economic activity but also promotes economic stability and growth provides centain goods and services that would otherwise be underproduced or not produced at all, and modifies the distribution of income. The government, however, is not the dominant economic force in deciding what to produce how to produce and we will get That force is the market Questions: In-Class Assignment-2-Chapter- 2-Economic Systems Discussion Questions Q-1. Every society needs to develop an economic system. Explain Q-2. How the Economic systems differ? (10) (ii) How the Economic systems can be classified? Q-3. What are the two extremes of laissez-faire capitalism? Q-4. What is the role of governments in Laissez-Faire Capitalism? (1) What are the views of laissez-faire proponents? (ii) No society has ever employed a laissez-faire system. Discuss why? Q-5. How does the Command System work? Mention Russian and Chinese experiences. Q-6. Explain what do you understand by the Market System