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Question: linkthere are two major types of economic systems which try...

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LinkThere are two major types of economic systems which try to best satisfy the scarcity problem. All economic systems suffer the combined existence of scarce resources and unlimited wants. One system is the command system which organizes the economy under state control. The government owns property and depends on central planning for resource allocation. Its biggest proponent was Karl Marx. It suffered two profound problems which are the coordination and the incentive problem Capitalism, conversely relies on economic freedom markets and private property ownership.See pages 29-32 in your book for a more expansive list. Most countries are considered mixed economies which combine elements of both. The Heritage Foundation grades economies based on how much economic freedom the country has. Singapore and Hong Kong usually top the polls with their large amounts of economic freedom and therefore more capitalistic. Countries like N Korea, Cuba and Venezuela traditionally score low indicating a more command economy. Pick a country and discuss whether its capitalistic or more command oriented? Give examples for each side. For example the US runs the post office which is an example of command system. On the other hand its got a broad stock market of privately owned companies which is capitalistic. Australia is perceived to be less
capitalistic than America: higher taxes, regulation and bigger government than US. However, the most recent Economic Freedom compilation had US 18th and Australia 5th. Heritage foundation compiles is extensive list.Link Freedom has been shrinking in the US . One example of Aussie Capitalism: the housing market is more free with far less government interference than US. This helped keep Aussie Banks out of trouble: no bailouts despite the global economic meltdown! On the other hand taxes are often higher in Australia. Update: economic freedom continues on the march in Asia and Africa broadly while falling pretty dramatically over the last decade in America. Why is economic freedom unpopular with some politicians? What are potential trade offs? see link to answer questions
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