Differentiate among capitalist, socialist and mixed economies.
SocialismAn economic system in which the government controls the output and prices of good and services is known as socialism. In a purely socialist system, the decisions of how to distribute the goods and services are entirely made by the government. In other words, people are solely reliant on the government for food, housing, income, and healthcare. North Korea a state-run dictatorship is an extreme example of a fully socialist system.
CapitalismCapitalism is an economic system whereby private companies and individuals own property and capital goods. The fundamental basis of capitalism is that the market determines prices and production in the economy.
In other words, the amount produced as well as the prices of goods and services are determined by the supply and demand for those goods and services. As a result, capitalism is often referred to as a market economy, which is in stark contrast to a centrally planned economy by a government.
Mixed Economy
A mixed economy is an economy that allows private property owners and businesses and consumers to freely use capital. However, in a mixed economy, governments can intervene through regulation of the economy, if it's deemed in the best interest of ever economic systems are not state-owned economies, meaning the government doesn't own all of the means of production. In contrast, pure capitalism is a free, private economic system that allows voluntary and competing private individuals to plan, produce, and trade without coercive public interference.
An economic system in which the government controls the output and prices of good and services is known as socialism. In a purely socialist system, the decisions of how to distribute the goods and services are entirely made by the government. In other words, people are solely reliant on the government for food, housing, income, and healthcare. North Korea a state-run dictatorship is an extreme example of a fully socialist system.
Capitalism is an economic system whereby private companies and individuals own property and capital goods. The fundamental basis of capitalism is that the market determines prices and production in the economy.
In other words, the amount produced as well as the prices of goods and services are determined by the supply and demand for those goods and services. As a result, capitalism is often referred to as a market economy, which is in stark contrast to a centrally planned economy by a government.
Mixed Economy
A mixed economy is an economy that allows private property owners and businesses and consumers to freely use capital. However, in a mixed economy, governments can intervene through regulation of the economy, if it's deemed in the best interest of ever economic systems are not state-owned economies, meaning the government doesn't own all of the means of production. In contrast, pure capitalism is a free, private economic system that allows voluntary and competing private individuals to plan, produce, and trade without coercive public interference.
