Chapter 2, Problem 18AA

To determine

To Explain: Characteristics of given economic system are to be explained.

Explanation of Solution

Economic system	Characteristics
Capitalism	Capitalism is an economic system where there are private individuals who owns the factor of production to earn profits. In a pure capitalism , there is no government interference and businesses and people make their own decisions. The main characteristics of capitalism are : (1) Private property rights (2) Economic freedom (3) Profit motive (4) Competition (5) Voluntary exchange.
Democratic socialism	Democratic socialism is defined as the social system in which system works under the constitutional framework for electing the socialists to office. Basically, not fully but only some areas of the economy are controlled by the government under democratic socialism. The characteristics of democratic socialism are : (1) It combines the idea of both socialism and democracy both. (2) Risk involved is less. (3) Less innovation. (4) Social Equality. (5) Redistribution of wealth.
Authoritarian socialism	This type of socialism follows the belief's of Marx. This is the system which supports the revolution as a mean to remove capitalism and focus to bring the socialists goals. Under this economic system , the economy is controlled by the central government. Characteristics of Authoritarian socialism are: (1) Restriction of political parties. (2) Media is controlled by the government.