Economic System - 1923 Words

Microeconomics Paper: Economic systems Yang Cong Professor Memmos Aug 1st, 2012 Table of Contents 1, Introduction of economic systems 2, the analysis of capitalism 3, Example of capitalism: the U.S. 4, the analysis of socialism 5, Example of socialism: China 6, the analysis of communism 7, Example of communism: North Korea 8, my favorite one is socialism 9, Conclusion There are three main economic systems in the world which are capitalism, socialism and communism. Nowadays, most developed countries are capitalism and they have certified that capitalism is better; the greatest developing country which owns the second high GDP in the world, China, is socialism, it seems that socialism is not bad; only a few countries are†¦show more content†¦American government always complies with Keynesian for a long time, and believes that the reason that total social supply is not the same to total social demand is the lack of effective demand (the analysis of American economy).† So most of the successive governments implement the expansionary deficit policies, in order to deal with cyclical fluctuations, and stimulate effective demand artificially. Deficit policies are easy to make economic bubble to stimulate the excessive consumption and promote market false prosperity, especially in the financial markets, it also has contributed to raise infla tion rates. Once the bubble bursts, the economic crisis would be coming. â€Å"Socialism is an economic system characterized by social ownership and cooperative management of the means of production, and a political philosophy advocating such a system (Wikipedia).† In socialism, the government needs to control the whole market in order to promote the productive power according to the current market situation. The main economic strategies are based on the market and include more government control than socialism. This is the best advantages of socialism because when the economic crisis was coming, the government could adjust the macro-control policies and introduced a series of initiatives to expand domestic demand and promote economic development. It achieved success quickly and efficiency. But, socialism is easy to establish monopoly enterprise. 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An economic system is the combination of the various agencies, and entities that provide the economic structure that defines the social community. Malaysia has adopting mixed economic systems. Mixed economic system is an economy where there is more