Written Response #2
1) Discuss the differences between a market-based economy and a command economy. Include in your description of each type of economy an indication of: Who determines production? What is the role of the government? What furthers or advances each type of economy? (2 Points)
While in a market economy, there are producers and consumers in the market and freedom of choice. In the command economy, there is ruling Communist Party bureaucracy and it’s the only choice. In a market economy, prices move freely match to help match demand and supply quantity for each good. In a market economy, prices are not any such role, the Communist Party bureaucracy tell consumers to buy bureaucracy has instructed producers to produce.
2) Describe (name and explain) the four (4) changes or developments which usually occur when a country undergoes economic transformation and moves toward a market-based economy. (2 points)
• Deregulation - Allowing free play of the market system without government restrictions, also allow private enterprises to transition to a market economy of establishment and run an enterprise's behavior.
• Privatization - Sale of state-owned enterprises to private investors.
• Further Development of the legal system to enact laws which support market economies.
• Emergence of the middle class - The middle class has the discretionary income, also the middle class has also played a major political and economic implications.
3) Apply and utilize (cite) the facts of the Country Focus to answer the following questions (5 points): a) What kind of economic system did India operate under during the period 1947-1990. What kind of economic system is India moving toward today? (5 points)
In 1947, India was characterized by a very low per capita income. There were a lot of people, so there was always a large gross domestic product, but capita income was very low. In some respects, India had fully developed capitalist economy, it has some of the oldest capitalist system in
While in a market economy, there are producers and consumers in the market and freedom of choice. In the command economy, there is ruling Communist Party bureaucracy and it’s the only choice. In a market economy, prices move freely match to help match demand and supply quantity for each good. In a market economy, prices are not any such role, the Communist Party bureaucracy tell consumers to buy bureaucracy has instructed producers to produce.
2) Describe (name and explain) the four (4) changes or developments which usually occur when a country undergoes economic transformation and moves toward a market-based economy. (2 points)
• Deregulation - Allowing free play of the market system without government restrictions, also allow private enterprises to transition to a market economy of establishment and run an enterprise's behavior.
• Privatization - Sale of state-owned enterprises to private investors.
• Further Development of the legal system to enact laws which support market economies.
• Emergence of the middle class - The middle class has the discretionary income, also the middle class has also played a major political and economic implications.
3) Apply and utilize (cite) the facts of the Country Focus to answer the following questions (5 points): a) What kind of economic system did India operate under during the period 1947-1990. What kind of economic system is India moving toward today? (5 points)
In 1947, India was characterized by a very low per capita income. There were a lot of people, so there was always a large gross domestic product, but capita income was very low. In some respects, India had fully developed capitalist economy, it has some of the oldest capitalist system in