0 votes
77 views
in Chapter 8 Introduction to Economics by (98.9k points)
edited
Distinguish between Capitalist Economy and Socialist Economy.

1 Answer

0 votes
by (98.9k points)
selected by
 
Best answer

 

Criteria Capitalist Economy Socialist Economy
Definition A capitalist economy is one in which private firms control key production components such as labor, natural resources, and capital goods. A socialist economy is one in which the government controls the elements of production such as labor, natural resources, and capital goods.
Determination of Price Demand and supply forces determine the pricing of products and services in a capitalist economy. The pricing of products and services is regulated and controlled by the government in a socialist economy.
Motive of Production In a capitalist economy, the primary motivation for producing products and services is to make money. In a socialist economy, the wellbeing of the general population is the primary motivation for creating commodities and services.
Role of Government When it comes to the production and distribution of goods and services, the government plays a minimal or non-existent role in a capitalist economy. The government has total control over the production and distribution of goods and services in a socialist economy.
Role of Private Sector In a capitalist economy, the private sector totally controls the production and distribution of commodities and services. In a socialist economy, the private sector has no involvement in the production and distribution of products and services.
Competition In a capitalist economy, competition between different enterprises is a necessary component. In a socialist economy, the government has no competitors.
Distribution of Income In a capitalist economy, income distribution is uneven. In a socialist economy, income distribution is more or less equal.

 

Related questions

0 votes
1 answer 92 views
0 votes
1 answer 80 views
0 votes
1 answer 87 views
0 votes
1 answer 82 views
0 votes
1 answer 87 views

Doubtly is an online community for engineering students, offering:

  • Free viva questions PDFs
  • Previous year question papers (PYQs)
  • Academic doubt solutions
  • Expert-guided solutions

Get the pro version for free by logging in!

5.7k questions

5.1k answers

108 comments

504 users

...