what are the advantages and disadvantages of a socialist economy?
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KEY Points. Disadvantages of socialism include slow economic growth, less entrepreneurial opportunity and competition, and a potential lack of motivation by individuals due to lesser rewards.
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On the other hand, in a socialist economy, the government plays a comprehensive role in almost all economic activities, such as production, distribution, and consumption, of a nation. ... In addition, in a socialist economy, the government plans and regulates all the economic activities centrally at a state level.
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A capitalist economy relies on free-markets to determine, price, incomes, wealth and distribution of goods. A socialist economic system is characterised by greater government intervention to re-allocate resources in a more egalitarian way.
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The advantage of a free market economy is that when it works, it can both reward and perpetuate innovation and hard work. A disadvantage of free market economies is that they are inherently more risky and thus tend to favor those who start out with more capital and resources.
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['Increased consumption. ... ', 'Higher investment in public services. ... ', 'Lower unemployment. ... ', 'Possible inflation. ... ', 'Current account deficit. ... ', 'Environmental costs. ... ', 'Income inequality. ... ', 'Social costs of economic growth.']
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['Low per capita income.', 'Occupational pattern – primary producing.', 'Heavy population pressure.', 'Prevalence of chronic unemployment and under-employment.', 'Need for a steady improvement in the rate of capital formation.']
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What are advantages of a mixed economy? Best of both world. You get freedom and benefits from the government. It also allows for growth in the economy.
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['(i) Time period. ... ', '(ii) Ability to store output. ... ', '(iii) Factor mobility. ... ', '(iv) Changes in marginal cost of production. ... ', '(v) Excess supply. ... ', '(vi) Availability of infrastructure facilities.']
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['Private ownership of resources. Free economies exist because a significant portion of resources are owned by individuals or companies in the private sector and not a central government agency. ... ', 'Thriving financial markets. ... ', 'Freedom to participate.']
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['Advantage: Less Infrastructure. ... ', 'Advantage: Limited Waste. ... ', 'Advantage: Strong Customer Relationships. ... ', 'Disadvantage: Equipment or Labor Failure. ... ', 'Disadvantage: Missed Deliveries.']
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The principal aim of a mixed economy is to maximise social welfare. This feature incorporates the merits of socialism and avoids the demerits of capitalism. To remove inequalities of income and wealth, and unemployment and poverty, such socially useful measures as social security, public works, etc.
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['Advantages of a Bureaucratic Structure. ... ', 'Advantage: Accountability. ... ', 'Advantage: Job Security. ... ', 'Advantage: Equal Chances to Succeed. ... ', 'Disadvantages of a Bureaucratic Structure. ... ', 'Disadvantage: Reduced Productivity and Innovation.']
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Communism and socialism are two types of command systems. In a socialistic economic system, the government owns most land and capital goods, but individuals still control their own labor. ... Pure economic systems, such as free-market capitalism, socialism, and communism, do not exist in the real world.
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['more International Trade.', 'more goods & services generally available at lower prices.', 'higher quality goods & services more generally available.', 'more Wealth in the world.', 'lower Cost of Living.', 'higher Standard of Living.', 'Waste Reduction from greater Economic Efficiency.']
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The advantage of a welfare state is that it ensures a greater level of equality among its citizens. The provision of a social service network protects people from disease, starvation and overall misery. The welfare system supports those who face a temporary crisis because of the loss of their job.
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['Provides higher standard of living. ... ', 'Ensures rational & optimum utilization of resources. ... ', 'Rapid industrial growth. ... ', 'Benefits of comparative cost. ... ', 'International cooperation and world peace. ... ', 'Facilitates cultural exchange. ... ', 'Better utilization of surplus production. ... ', 'Availability of foreign exchange.']
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['Advantage #1: Savings on some expenses. ... ', 'Disadvantage #1: Unstable income. ... ', 'Advantage #2: A more flexible schedule. ... ', 'Disdvantage #2: Difficulty picking up work. ... ', 'Advantage #3: The end of the rush hour. ... ', 'Disadvantage #3: Isolation. ... ', 'Advantage #4: The freedom to choose your assignments. ... ', 'Disadvantage #4: The loss of a client.']