BUSINESS ENVIRONMENT ECONOMIC SYSTEM AND BUSINESS ENVIRONMENT Economic

BUSINESS ENVIRONMENT ECONOMIC SYSTEM AND BUSINESS ENVIRONMENT

• Economic system and business environment: The economic system in a country exerts a great influence on the development prospects. Govt regulates economic activities based on the country’s economic system only. The economics activities are carried out with a view to earn, save and spend.

• Economic System is three Types Namely, Ø Capitalism ØSocialism ØMixed Economy

v Capitalism: In a capitalist economics Systems, the means of pdn are Owned and operated by private individuals whose main object is to maximize profits 1. “Free enterprise, competition and private ownership of property. 2. “Free enterprise economy” or “Free Marketed economy” 3. Which free enterprise, competition and private ownership generally prevail “Prof. Loucks say’s Capitalism is a system of economics origin featured by the private ownership and the use for private profit of was made and nature made capital. Kind of capitalism: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Laissez Faire. Mixed Capitalism. Freedom to choose occupation. Market mechanism. Consumers sovereignty. Freedom to save and spend. Competition among sellers. Freedom to enter into contracts. Inheritance No capital plan.

v. Socialism: “Communist economics system” or centrally planned economics it is an alternative to capitalism economics system in which the means of regularted and directed by the state. According economics which the means are owned and operated by the state for the maximisation. § Features of socialism: § no private property § Property and means of the controlled by the state § Careless society § Each individual has the work to the best ability § Assurance by the state that it would fulfil th eneeds of individuals § Full employment § Equality of opportunity to rise in life § Social welfare motive § Economic planning

v. Mixed Economy: Mixed economy is the consideration of capitalism and Socialism under the mixed economy the advantage of both capitalism and socialism are incorporated and at the same time their avoided. v. Characteristics of mixed economy: Ø Co-existence of the private and public sectors. Ø Existence and joint sectors. Ø Regulation of private sectors. Ø Planned Economy Ø Private property Ø Provision of social security Ø Motive of business concerns Ø Reduction of inequalities of income and wealth Ø Complete economics freedom

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