Professional Documents
Culture Documents
PROBLEMS
Way of organizing the relationship among
individuals, firms & government agencies
How to make choices
To answer basic economic questions (i.e.
what/how/for whom to produce
Economic
Systems
Characteristics
Social Economy
Government/Central
Authority make economic
decisions
Individuals/Sellers make
economic decisions using a price
system
Capitalism
Economy (Free
market
economy)
Mixed Economy
Islamic
Economy
SOCIALISM
Public ownership of resources
Particular industries
Gambling
Uncertainties
Freedom of economy enterprise
ISLAMIC
ECONOMY
Public & private
ownership by God
Resources
are owned
by God
Human
beings are
the trustees
to
Economy
Systems
What to
produce
How to produce
Capitalism
Only based
on
demands
by the
consumers
to enjoy
high profits
Socialism
-Decisions
by planning
authorities
Variety of
To the
Capitalism
methods
consumers
depends on the
who are
Merits
price
of
affordable
resources
to buy it
Production according
Inequality of
(price
to needs of
distribution of wealth
mechanis
consumers
& income
m)
Economic freedom
Inflation & high
-Choice
between
Efficient
utilizationDistributio
of
traditional/mode
ns of unemployment rate
resources
rnGreater variety of various
Lack of social welfare
consumer goods commoditi
-Decide
by trade,
es among
Enhance
Unnecessary variety &
authorities
citizens
business & research
wasteful competition
& dev (R&D)
Flexibility
Misallocation
of
-Public & private
Decided
by
sectors will
publicresources
&
decide on the
private
techniques of
sectorSocial costs
production
Gov
interventio
n through
taxes &
subsidies
-Based
nation
needs
Mixed
- Decided
by both
public &
private
-Depends
on
considerati
on of social
welfare &
economic
growth
Interest
For whom
to produce
Merits &
Demerits
ECONOMIC DECISIONS