Questions what is the main features of the socialist economy?

Disadvantages of socialism?

Key words: tax burden, property ownership, welfare, innovation opportunities
Lack of incentives. If an economy has high rates of tax burden, it could cause disincentives to work and setting up business. Entrepreneurs may feel that if the government is taking a high percentage of their profits, they would prefer not to take the risk or work abroad.
Lack of economic freedom. While property ownership is regulated by society, it takes away people’s freedom to enterprise, which in turn takes away people’s free choice of occupation.
Welfare state can cause disincentives. If a welfare state is too generous, it is argued it may create a disincentive to get a job and therefore it can reduce the labor force and individual effort.
Lack of competitiveness and innovation. Socialism does not reward entrepreneurial ventures or competitiveness. Consequently, a socialistic system does not encourage innovation opportunities.

4. 
   What is the main features of the capitalist economy?
   

Key words: profit motive, minimal government intervention, competition, private property ownership
Profit motive is seen as important for enabling an efficient distribution of resources and encouraging innovation and responsive markets.
Minimal government intervention. Government intervention is limited for the protection of private property and provision of public goods.
Competition. True capitalism needs a competitive market. Without competition, monopolies exist, and instead of the market setting the prices, the seller is the price setter.
Right to private property ownership. This right means that private property such as property, factories, machines, plants etc. can be owned under private individuals and companies.

5. 
   Advantages of capitalism?
   

Key words: freedom to choose, efficiency of private sector, living standards, economic growth
Freedom to choose. Consumers enjoy a wider choice of products and services to choose from since this system allows firms to compete with other companies in the economy.
Efficiency of private sector. Most political theorists and economists argue that capitalism is the most efficient and productive system of exchange. Private property promotes efficiency by giving the owner of resources an incentive to maximize its value.
Rise of living standards. Capitalism creates a dynamic environment, characterized by increasing opportunity. The economic growth allows individuals to increase their living standards, facilitating economic and social mobility.

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