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PRESENTATION ON Economic system
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PRESENTATION ON Economic system

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  • 1. AN ECONOMIC SYSTEM SUBMITTED TO: SUBMITTED BY:
  • 2. An Economic System An Economic System is a system that involves production, distribution and consumption of goods and services between the entities in a particular society. It can either be completely owned and operated either by Manufacturers & Industrialists or by Government or by both with combining their efforts.
  • 3. Capitalist Economy System:  Businesses are managed and owned by corporate & entrepreneurs.  Limited role of Government.  There are free private enterprises.  Price of goods & services are decided by market mechanism on the basis of demand & supply.  Although Profit motive is there but supremacy of consumers also exists.
  • 4. Merits of Capitalism: Gives encouragement to business. Higher rate of Capital formation. Optimum utilization of resources. It is a justified system as competent entrepreneurs are rewarded.
  • 5. Demerits of Capitalism: Inequality in income. This income inequality gives rise to class conflicts. Problem of unemployment. Lack of welfare. Emergence of monopoly.
  • 6. Socialist Economy System:  Socialist Economy is also referred as Centrally Governed Economy.  Institutions are owned by Government on behalf of public.  Govt. decides about establishment, location, production, distribution and prices of goods & services.  All activities are carried out for welfare of the society.  Freedom to choose any occupation is restricted.
  • 7. Merits of Socialism: There is Social justice for all segments of society. No class conflicts because of equitable distribution. Problem of unemployment is solved. Better utilization of resources can be done by putting them to appropriate use.
  • 8. Demerits of Socialism:  Biggest problem of Redtapism(corruption).  No encouragement to private owners for their own venture.  Concentration of economic power remains in hands of politicians & govt. officials.  Social welfare is only a myth as deserving candidates are not benefited.
  • 9. Mixed Economy System:  Compromise between Capitalist & socialist Economic Systems.  Co-existence of public & private enterprises. Works on platform of PPP.  For establishing a private enterprise , entrepreneurs are required to obtain certain licenses or No Objection Certificate(NOC) form govt. authorities.  Both the Profit motive and Social Welfare Motive are fulfilled.
  • 10. Merits of Mixed Economic System: Concept of social justice works. Competition between Public sectors & Private sectors which ultimately leads to benefit to society. Proper Employment opportunities are provided to the population. Equitable distribution of income is there.
  • 11. Demerits of Mixed Economic System: However equal income distribution is emphasized still some big parties enjoy economic power. Political parties have a big influence over bureaucrats & govt. officials. Sometimes the non deserving people enjoys the benefits in the name of nationalism.