Business Environment

9

ECONOMIC SYSTEM AND CAPITALISM

The study of economic systems is important to a student of the economic environment of business inasmuch as business activities take place within the economic system and are impacted by the policies adopted within the system by the state. In this chapter, we examine what an economic system is, and what problems it usually addresses. We focus on capitalism, its features, and its merits and demerits. We identify why it is the preferred system for most of the developed countries.

WHAT IS AN ECONOMIC SYSTEM?

Economic activities take place within the framework of an economic system. An economic system is the socio-economic and political framework within which an economy functions. The choice of an economic system ...