Capitalism In The Social Economy

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Housing is a necessity because shelter can be termed a basic human requirement and as such the availability of housing for shelter is important to every individual. Free market can also be described as the capitalist system where the supply and demand forces are the determinants of what to produce in the product markets. ECONOMICS COURSEWORK 2 Capitalism can be defined as an economic system in which the means of production and distribution are owned and controlled by the private individuals and there is usually minimal government participation. “Free market can lead to the best allocation of resources from society’s perspective and also to maximize social welfare”- Andrew Gillespie. But we cannot overlook the fact that in as much as there…show more content…
In the socialist economic system resources are equally allocated meaning that there is an even distribution of resources between individuals and in the socialist economic system the aim is not to maximize profit and as such this particular economic system cannot be termed as exploitative. Free market determines the price of housing because in a free market which is also a capitalist market the demand and supply force are the determinants of price. Price mechanism can be described as a value system, in which the costs of merchandise or administrations influence the free market activity of products and ventures, basically by the price versatility of interest. A price component influences the two purchasers and venders who arrange costs A price instrument influences each financial circumstance in the long run. Another case of the impacts of a value instrument over the long run includes fuel for cars. On the off chance that fuel turns out to be costlier, at that point the interest for fuel would not diminish quick but rather in the long run organizations will begin to create options, for example, biodiesel fuel and…show more content…
Depends on the elasticity of demand- if demand is inelastic, change in price will not really increase demand. Subsidy may encourage inefficiency because the price of the good will not reflect the true cost. ECONOMICS COURSEWORK 6 The government can also encourage the organization of youth empowerment programs to reduce the level of unemployment amongst the youths and also to train them to be self-sufficient. Useful skills can be developed through these programs such as architecture of furniture making and not only will this enable them provide homes for themselves but they would also be able to contribute to the growth of the economy which will in turn lead to the increase in the gross domestic product of the country. The government should put in place a law to punish developers who after a long period of owning a land don’t build on it. If the country adopts a socialist economic system the government can place a limitation on foreign investors using homes as safety deposit boxes. There are so many uncompleted and abandoned buildings in Mexico and so the government should find a way to take over these buildings if their owners fail to show up within certain periods of
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