SYSTEM ECONOMY

DEFINITIONS:

• SET OF CUSTOMS LAW, THE LAW RULES RELATING TO THE PRODUCTION, EXCHANGE AND CONSUMPTION OF GOODS AND SERVICES.

• AN ECONOMIC SYSTEM CONSISTS OF A SET OF CONTROLS TO DETERMINE HOW MANY RESOURCES USED TO SATISFY THE REQUIREMENTS OF

THERE ARE 5 BASIC FEATURES OF THE ECONOMIC SYSTEM:

• PROPERTY OWNERSHIP

• STARTUP COMPANY

• ECONOMIC INCENTIVES

• PRICING MECHANISM

• MARKET COMPETITION

TYPE OF ECONOMY SYSTEM

CAPITALISM SOCIALISM COMUNISM MIXED ECONOMY

ISLAMIC ECONOMY

CAPITALISM• Derived from the word capital (English: capital), which means "capital"• This system was introduced by Karl Marx• economic and social system that tends toward the accumulation of wealth

by individuals without government interference and seeks profit

• Capitalist economic system driven by market forces in determining the production, cost, pricing of goods and services, investment and income

• capitalist thought this system creates an obvious disparity between the rich and the poor. System contrary to this ideology was communism and socialism.

• In this system individu will own the source and wealth without any distrubted.

ADVANTAGE

There solutions economic

power

there is economic freedom

maximum efficiency

there are power users

DISADVANTAGE

misuse of resources effect

externalities

lack of public product monopoly power exists

lack of laborers

SOCIALISM• This system is also known as the central planning system• An economic system whose goal is to serve the society, is

general, not specific individuals.• Factor of production or economic resources controlled by the

state, individuals are not given the freedom to have it.• government is directly involved in regulating economic

activity.

Large scale production

Fairness opinion

distribution

Expenditure without rival

economic stability

ADVANTAGE:

MISTAKES IN DECISION MAKING

LESS INITIATIVE AND MOTIVATION

NO DEVELOPING TECHNOLOGY AND

INNOVATION

DISADVANTAGE:

COMUNISM (SOVIET UNION)• Introduced by Karl Marx as the final stage in human society.

• Type promote socio-economic growth of a classless society based on common ownership and control of the factors of production and property in general.

• The system aims to integrate the management of all economic resources.

•Main idea was simple: Free the lower class from poverty and give the poor fighting chance.

• IN ORDER TO LIBERATE LOWER CLASS,THE GOVERNMENT WOULD HAVE TO CONTROL ALL MEAN OF PRODUCTION.

• COMMUNISME IS A SYSTEM OG GOVERNMENT AND IDEALS WHERE ALL PEOPLE ARE CONSIDERED EQUAL IN AN ATTEMPT TO CREATE A FAIRER SOCIETY.

• INHERITANCE AND OWNING A BUSINESS FOR PRIVATE GAIN FOR EXAMPLE IS FORBIDDEN

ADVANTAGE

Fairness distribution,all people get

Economic problems rarely occur

Any expenditure activities run smoothly

Can provide the perfect designation and sufficient labor

DISADVANTANGE

The freedom of each individual to progress stalled.

There is no competition between the public

People do not have any ownership of the resource

Encourage people to avoid work.

Collective ownership would not be efficient.

DIFFERENCE &

SIMILARITY

DIFFERENCE CAPITALISME SOSIALISM KOMUNUSIMSOURCE OWNERSHIP

INDIVIDUAL GOVERNMENT GOVERNMENT

COMPETITION MARKETING

HAS COMPETITION

NOT HAS COMPETITION

NOT HAS COMPETITION

PRICE MECHANISMS

FIRMS CONTROL

GOVERNMENT GOVERMENT

ECONOMIC PROGRESS

FAST PROGRESS

SLOW PROGRESS

SLOW PROGRESS

TECNOLOGY DEVELOPMENT

FAST DEVELOPMENT

SLOW DEVELOPMENT

SLOW DEVELOPMENT