Characteristics Of Economic Systems

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Economic systems are varied in today’s world. Oxford Dictionaries defines an economic system as “a system by which a society or other structure is organized with regard to its economy” (n.d.). In laymen’s terms, it is a structure for using “limited resources” (Kelly, 2016). Economic systems have existed all throughout history and changes over time have left us with a few options. Currently, countries tend to operate under capitalism, socialism, communism, or mixed economies. We will detail them here.

America is a capitalist society. While in economics and business, capitalism refers to the economic system, the whole of United States society is informed and changed by the free market system. Dictionary.com defines capitalism as “an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations” (n.d.). Capitalism is characterized by the motive for profits, little to no government involvement, fierce competition (which is good for consumers), and adaptability (Zucchi, 2014).

Individuals and corporations are, as we learn in economics, are not likely to make decisions that will be detrimental to them (Miller, 2012). Therefore, the entrepreneurial spirit drives the urge for …show more content…

Equal opportunity gives individuals the ability to ensure that they will be able to provide for themselves, along with the state providing for them. Less competition in the market can stagnate innovation but, these days, with the exponential technological advances, innovation is simply a given. Central planning is government oversight to promote fairness and equity for all. Socialist countries usually pay for their services using value added tax which is a much higher tax rate

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