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Capitalist Economy |
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Capitalist economy also known as capitalism is one of the types of economy. Each type of economy plays an important role in building country's progress. In this type of economy the production, exchange and distribution are in the hands of private sectors. Capitalist economy encourages private investments. The means of production and other economic activities are entirely owned by private sectors also called capitalist. In this type of economy the capitalist have the right to determine all the operation.
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The originator of this type of economy was Adam Smith. He believed that every human being is self serving and in order to full fill his/her needs the society has to acquire all basic necessity. He stated that society would only be benefited if there are no monopolies. Efficiency is the key factor in a capitalist economy. Every country has a different type of economic system. In each economic system the resources, technology and labor are used in different ways. The usage of various elements in an economy is also different. So is the usage of elements in capitalist economy. The reason why capitalist economy is so much in demand is that the production and exchange of goods and services is owned by business firms and private individuals.
The capitalism was originated in Europe. Capitalism was spread to other countries with the onset of 19th century. It became a dominant economic system till World War I. In a capitalist economy the main factor is the capital. As the capital for production and distribution is owned privately the private sectors have a strong hold on this type of economy.
One of the important characteristics of capitalist economy is that all the economic activities are done through the interactions of sellers and buyers. Many events and ideas in 20th century gave a new meaning to capitalist economy.
Consumers plays an important role in every economic system so is in capitalist economy. Capitalist economy is very dominant in western world. The industrial revolution gave a new dimension to capitalist economy. Many economist have come up with various types of economy. The 19th and 20th century saw the rise of capitalist economy. As technology is growing and world is developing so is the concept of economy is changing. Many countries have adapted capitalist economy. This economy is dominant especially in western countries. Capitalist economy has helped to improve the economy of many countries. Looking into the present market competition the capitalist economy is helping the private sectors to keep the production and distribution of goods in line. |
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