SSC CGL Exam > SSC CGL Videos > SSC CGL Tier 2 - Study Material, Online Tests, Previous Year > Economy and Economic system: Types of Economic System Llan and Importance of Plan and Objectives
Economy and Economic system: Types of Economic System Llan and Importance of Plan and Objectives Video Lecture | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year
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FAQs on Economy and Economic system: Types of Economic System Llan and Importance of Plan and Objectives Video Lecture - SSC CGL Tier 2 - Study Material, Online Tests, Previous Year
| 1. What are the different types of economic systems? |  |
Ans. There are three main types of economic systems:
1. Capitalism: In this economic system, individuals and businesses own and control the production and distribution of goods and services. Prices are determined by supply and demand in a free market.
2. Socialism: In a socialist economic system, the government owns and controls the means of production. The goal is to distribute wealth and resources more equally among the population.
3. Mixed Economy: As the name suggests, a mixed economy combines elements of both capitalism and socialism. It allows for private ownership and market forces, but also includes government intervention and regulation.
| 2. What is the importance of having a plan and objectives in an economic system? | |
Ans. Having a plan and objectives in an economic system is crucial for several reasons:
1. Efficiency: A well-defined plan helps in coordinating economic activities, optimizing resource allocation, and minimizing waste. It ensures that resources are used effectively to achieve desired outcomes.
2. Direction: Clear objectives provide guidance and direction to policymakers, businesses, and individuals. They help in defining priorities and making informed decisions to steer the economy in a desired direction.
3. Stability: A plan with well-defined objectives promotes stability in the economy. It enables policymakers to anticipate challenges, mitigate risks, and implement measures to maintain economic stability.
4. Accountability: Objectives serve as benchmarks against which the performance of the economic system can be evaluated. They provide a basis for holding policymakers and institutions accountable for their actions and outcomes.
5. Progress: A plan and objectives allow for long-term vision and progress. They help in identifying areas for improvement, promoting innovation, and driving economic growth over time.
| 3. What are some examples of countries with a capitalist economic system? | |
Ans. Some examples of countries with a capitalist economic system include:
1. United States: The United States is often regarded as the epitome of capitalism, with a strong emphasis on free markets and private ownership.
2. United Kingdom: The UK has a market-oriented economy where private enterprise and individual ownership play a significant role.
3. Germany: Germany practices a social market economy, which combines elements of capitalism and social welfare policies.
4. Japan: Japan has a capitalist system known for its emphasis on exports, technological innovation, and strong business sector.
5. Australia: Australia follows a market-based economic system with a focus on private enterprise and open trade.
| 4. How does socialism differ from capitalism? | |
Ans. Socialism and capitalism are two contrasting economic systems:
1. Ownership: In capitalism, private individuals and corporations own the means of production. In socialism, the government or community collectively owns and controls the means of production.
2. Distribution: Capitalism relies on market forces to determine the distribution of goods and services, with prices determined by supply and demand. Socialism aims for more equal distribution, often through government intervention and planning.
3. Incentives: Capitalism incentivizes individual effort and innovation through the potential for profit. Socialism emphasizes collective welfare and aims to reduce income inequality.
4. Government Role: Capitalism promotes limited government intervention, allowing market forces to largely dictate economic activities. Socialism involves a more active role for the government in guiding economic decision-making and redistributing resources.
5. Economic Equality: Capitalism can lead to wealth disparities, while socialism strives for greater economic equality among individuals and social classes.
| 5. What are the advantages and disadvantages of a mixed economic system? | |
Ans. A mixed economic system has both advantages and disadvantages:
Advantages:
1. Flexibility: A mixed economy allows for a balance between market forces and government intervention, providing flexibility to adapt to changing economic conditions.
2. Welfare: Government intervention in a mixed economy can help provide social welfare programs, such as healthcare, education, and housing, to ensure a basic standard of living for citizens.
3. Stability: Mixed economies often have mechanisms in place to mitigate the negative effects of business cycles, such as unemployment benefits and regulations to prevent market failures.
Disadvantages:
1. Inefficiency: Government intervention in the market can sometimes lead to inefficiencies and bureaucracy, slowing down decision-making and hindering economic growth.
2. Inequality: Mixed economies may still face income disparities, as market forces and private ownership can contribute to wealth concentration.
3. Lack of Clarity: Finding the right balance between market forces and government intervention can be challenging, and conflicting objectives may lead to policy inconsistencies.
4. Dependency: Mixed economies can create a dependency on government support, potentially reducing individual initiative and innovation.
Text Transcript from Video
hello students we are here for our video
lecture series today our topic for
discussion is chapter 2 of our book
indian economic development the name of
the chapter is indian economy during
1950 to 1990 first of all we should know
that what is economy actually economic
system by which people gets a living in
contrast economic system is arrangement
for the production and distribution of
goods and services in a society and this
economic system is divided into three
categories
first is capitalistic economy
commonly known as market economic
sometimes also known as free market
economy the second economic system is
socialistic economy or centrally planned
economy or command economy and the third
economic system is mixed economy let us
start our chapter with the understanding
of all these three types of economies
firstly the capitalistic economy
capitalistic economy is one we are all
factors of production that is land labor
capital and interpreter are owned and
controlled by private individuals owned
by private individuals means that in
capitalistic economy there is no role of
government and if there is then it is
very minimum role private individuals
also suggest that motive in the
capitalistic economy is profit
maximization instead of social welfare
in this capitalistic economy market
forces that is demand and supply plays
an important role here income
distribution is unequal means there is a
wide gap between rich and poor
consumer is the kingpin of the
capitalistic economy it is the consumer
who leads the producer what to produce
producer produces only those Goods which
are demanded by consumers not as
directed by the government there is a
greater degree of consumer choice in the
capitalistic economy buyers and sellers
both have a sense of competition and
freedom of enterprise is also an
important feature of capitalist economy
means enterpreneur is free whatever to
produce but in according to the demand
of consumer so these were the features
of capitalistic economy now move to the
socialistic economic socialistic economy
has features entirely different from
capitalistic economy in the sense that
here factors of production land labor
capital are owned and controlled by the
whole community represented by the state
whereas in capitalistic economy these
vectors of production were owned and
controlled by the private individuals in
socialistic economy government plays a
major role in the socialistic economy it
is government who is the kingpin in the
socialistic economy therefore motive
here is also social welfare instead of
profit maximization as was in the case
of capitalistic economy due to the
motive of social welfare here income
distribution is relatively equal that is
there is no gap between rich and poor
role of market forces that is the role
of demand and supply a price mechanism
is little in the socialistic economy
there is no freedom of choice to be
consumer and no choice of enterprise to
the firm because everything is decided
by government but freedom from hunger is
guaranteed in this economy choice of
occupation that is what to produce by
the producer is determined by some
Authority on the basis of certain
socio-economic
goals before the nation not on the basis
of demand made by consumers as in the
capitalistic economy some students these
were the features of socialistic economy
now the turn of mixed economy mixed
economy is one which has the features of
both capitalistic and socialistic
economy that is an economy which has
both private sector and public sector
where factors of production are partly
owned by private individuals and partly
owned by government that economy is
known as mixed economy now can you tell
what is the nature of Indian economies
whether it is capitalistic economy
socialist economy or mixed economy
surely India has private sector and
public sector both therefore undoubtedly
it can be said that India is purely of
mixed economy after discussing economy
and its types our next topic to discuss
in this chapter is the five-year plans
of India and its goal we also study the
development policies in different
sectors sectors like agriculture
industry and trade from 1950 to 1990 in
this chapter so let's understand the
concept of plan and economic planning
first of all we should know what is plan
what is the importance of plan why plan
is necessary a plan means
how the resources should be put to their
efficient use in our day-to-day life
also we makes plan for everything
plan means general goal as well as
specific goals to be achieved within a
specific period in India plans are made
for a period of 5 years generally termed
as 5-year plan India also makes plan to
be achieved over a period of 20 years
this 20-year plan this long-term plan is
called as perspective plan
but you should know these five years
plan provide basis to the long-term
perspective clangs the objective behind
long-term perspective plan is five years
plan different goals are set for
different five years plan in India there
may be a goal of modernization of
Technology if we modernize the
technology we have to remove the labor
and have to adopt the machinery but now
it will be in conflict with the goal of
generation of more employment as
technology hits the labor technology
hits the employment so the ultimate
responsibility for overall planning is
with the Planning Commission which was
set up in March 1950 this Planning
Commission said to several
socio-economic objectives to be achieved
under various five-year plans but
whatever may be the objective of any
five-year plan the basic goals behind
all five-year plans are categorized into
four categories these four basic goals
are goal of economic growth goal of
modernization goal of self-reliance and
goal of equity let us discuss these four
basic goals of 5-year plans one by one
first is economic growth it is primary
objective of any five-year plan due to
backward and constant state of Indian
economy on the eve of Independence we
know at the time of Independence we were
very backward we needed economic growth
so it is a primary objective of any
five-year plan growth means increase in
country's capacity to produce more more
of both goods and services within the
country continuous increase in gross
domestic production is a good indicator
showing economic growth gross domestic
production means market value of all the
goods and services produced in the
during an accounting year gross domestic
production is obtained from the
different sectors of the economy namely
the agricultural sector industrial
sector in the service sector simply we
can say whatever we produce in our all
the three sectors whether production is
in agricultural sector whether
production is in industrial sector and
whether production is in service sector
whatever we produce in all these three
sectors actually we convert it into
their monetary value and the total of
that monetary value is known as gross
domestic production and if our gross
domestic production is increasing per
year per year per year we can say that
we are going towards economic growth
contribution made by each of these
sectors makes of the structural
composition of the economy
apart from this economic growth may also
be in the form of a larger stock of
productive capital or a larger size of
supporting services like transport and
banking or it may be in the form of
increasing efficiency of productive
capital and services if we want that
people of India are to enjoy a more rich
and varied life then it is necessary to
produce more of both goods and services
that is to increase economic growth now
a second goal of five-year plan is
modernization modernization was set as
an objective of five-year plan because
India's cost of production was high and
it could not also compete with
international brands in quality as India
lacks technical knowledge this was the
technical knowledge which requires
modernization and we know adoption of
new technology is known as modernization
it means those changes in economic
activities which make an economic more
progressive and modern actually a layman
understands that modernization means
adoption of technology but modernization
means something more it does not refer
only to the adoption of new technology
rather it means more modernization also
means changes in a social outlook it
means changes in our cultural outlook
such as we should give importance to
women also we should recognize that
women should have the same rights as men
a model society uses the talents of
women in the workplace light in banks
school etc and such a society which uses
the talent of women is considered as
more prosperous and modern now the third
goal of every five-year plan is
self-reliance self-reliance means
independent of others it means not
depending on external help
it helps means self-reliance helps in
reducing the interference of foreign
countries in providing us food supplies
capital investment and debts the 1st and
7 five-year plans gave importance to
self-reliance which means first a 7 year
plans focuses on avoiding import of
those goods which could be produced in
India itself fourth goal of every
five-year plan is equity equity refers
to equality equity means that economic
development achieved through above 3
goals is shared by all the citizens to
promote social justice it is important
to ensure that the benefits of economic
prosperity are reaching to the poor
sections also as well instead of being
enjoyed only by rich so in addition to
economic growth modernization and
self-reliance equity is equally
important for the growth of any
me equity aims that every Indian should
be able to meet his or her basic needs
such as food house education and health
students do not forget education and
health are also our basic needs it was a
early time when basic needs were
considered only three that were food
clothes and house but in today's world
education and health are also our basic
needs equity also aims at reducing
inequality in the distribution of Filth
so all this was about goals of five-year
plans this all was for today let us
revise what we have done today we
started our chapter with the term
economy simultaneously we compared the
economy with the term economic system
then we discussed three types of
economic systems namely capitalistic
economy socialistic economy and mixed
economy next we discussed the term plan
and importance of plan and lastly today
we did four basic objectives behind each
five-year plan namely basic goal of
economic growth basic goal of
self-reliance basic goal of
modernization and basic goal of equity
the rest we will do in our next lecture
thanks for today
lecture series today our topic for
discussion is chapter 2 of our book
indian economic development the name of
the chapter is indian economy during
1950 to 1990 first of all we should know
that what is economy actually economic
system by which people gets a living in
contrast economic system is arrangement
for the production and distribution of
goods and services in a society and this
economic system is divided into three
categories
first is capitalistic economy
commonly known as market economic
sometimes also known as free market
economy the second economic system is
socialistic economy or centrally planned
economy or command economy and the third
economic system is mixed economy let us
start our chapter with the understanding
of all these three types of economies
firstly the capitalistic economy
capitalistic economy is one we are all
factors of production that is land labor
capital and interpreter are owned and
controlled by private individuals owned
by private individuals means that in
capitalistic economy there is no role of
government and if there is then it is
very minimum role private individuals
also suggest that motive in the
capitalistic economy is profit
maximization instead of social welfare
in this capitalistic economy market
forces that is demand and supply plays
an important role here income
distribution is unequal means there is a
wide gap between rich and poor
consumer is the kingpin of the
capitalistic economy it is the consumer
who leads the producer what to produce
producer produces only those Goods which
are demanded by consumers not as
directed by the government there is a
greater degree of consumer choice in the
capitalistic economy buyers and sellers
both have a sense of competition and
freedom of enterprise is also an
important feature of capitalist economy
means enterpreneur is free whatever to
produce but in according to the demand
of consumer so these were the features
of capitalistic economy now move to the
socialistic economic socialistic economy
has features entirely different from
capitalistic economy in the sense that
here factors of production land labor
capital are owned and controlled by the
whole community represented by the state
whereas in capitalistic economy these
vectors of production were owned and
controlled by the private individuals in
socialistic economy government plays a
major role in the socialistic economy it
is government who is the kingpin in the
socialistic economy therefore motive
here is also social welfare instead of
profit maximization as was in the case
of capitalistic economy due to the
motive of social welfare here income
distribution is relatively equal that is
there is no gap between rich and poor
role of market forces that is the role
of demand and supply a price mechanism
is little in the socialistic economy
there is no freedom of choice to be
consumer and no choice of enterprise to
the firm because everything is decided
by government but freedom from hunger is
guaranteed in this economy choice of
occupation that is what to produce by
the producer is determined by some
Authority on the basis of certain
socio-economic
goals before the nation not on the basis
of demand made by consumers as in the
capitalistic economy some students these
were the features of socialistic economy
now the turn of mixed economy mixed
economy is one which has the features of
both capitalistic and socialistic
economy that is an economy which has
both private sector and public sector
where factors of production are partly
owned by private individuals and partly
owned by government that economy is
known as mixed economy now can you tell
what is the nature of Indian economies
whether it is capitalistic economy
socialist economy or mixed economy
surely India has private sector and
public sector both therefore undoubtedly
it can be said that India is purely of
mixed economy after discussing economy
and its types our next topic to discuss
in this chapter is the five-year plans
of India and its goal we also study the
development policies in different
sectors sectors like agriculture
industry and trade from 1950 to 1990 in
this chapter so let's understand the
concept of plan and economic planning
first of all we should know what is plan
what is the importance of plan why plan
is necessary a plan means
how the resources should be put to their
efficient use in our day-to-day life
also we makes plan for everything
plan means general goal as well as
specific goals to be achieved within a
specific period in India plans are made
for a period of 5 years generally termed
as 5-year plan India also makes plan to
be achieved over a period of 20 years
this 20-year plan this long-term plan is
called as perspective plan
but you should know these five years
plan provide basis to the long-term
perspective clangs the objective behind
long-term perspective plan is five years
plan different goals are set for
different five years plan in India there
may be a goal of modernization of
Technology if we modernize the
technology we have to remove the labor
and have to adopt the machinery but now
it will be in conflict with the goal of
generation of more employment as
technology hits the labor technology
hits the employment so the ultimate
responsibility for overall planning is
with the Planning Commission which was
set up in March 1950 this Planning
Commission said to several
socio-economic objectives to be achieved
under various five-year plans but
whatever may be the objective of any
five-year plan the basic goals behind
all five-year plans are categorized into
four categories these four basic goals
are goal of economic growth goal of
modernization goal of self-reliance and
goal of equity let us discuss these four
basic goals of 5-year plans one by one
first is economic growth it is primary
objective of any five-year plan due to
backward and constant state of Indian
economy on the eve of Independence we
know at the time of Independence we were
very backward we needed economic growth
so it is a primary objective of any
five-year plan growth means increase in
country's capacity to produce more more
of both goods and services within the
country continuous increase in gross
domestic production is a good indicator
showing economic growth gross domestic
production means market value of all the
goods and services produced in the
during an accounting year gross domestic
production is obtained from the
different sectors of the economy namely
the agricultural sector industrial
sector in the service sector simply we
can say whatever we produce in our all
the three sectors whether production is
in agricultural sector whether
production is in industrial sector and
whether production is in service sector
whatever we produce in all these three
sectors actually we convert it into
their monetary value and the total of
that monetary value is known as gross
domestic production and if our gross
domestic production is increasing per
year per year per year we can say that
we are going towards economic growth
contribution made by each of these
sectors makes of the structural
composition of the economy
apart from this economic growth may also
be in the form of a larger stock of
productive capital or a larger size of
supporting services like transport and
banking or it may be in the form of
increasing efficiency of productive
capital and services if we want that
people of India are to enjoy a more rich
and varied life then it is necessary to
produce more of both goods and services
that is to increase economic growth now
a second goal of five-year plan is
modernization modernization was set as
an objective of five-year plan because
India's cost of production was high and
it could not also compete with
international brands in quality as India
lacks technical knowledge this was the
technical knowledge which requires
modernization and we know adoption of
new technology is known as modernization
it means those changes in economic
activities which make an economic more
progressive and modern actually a layman
understands that modernization means
adoption of technology but modernization
means something more it does not refer
only to the adoption of new technology
rather it means more modernization also
means changes in a social outlook it
means changes in our cultural outlook
such as we should give importance to
women also we should recognize that
women should have the same rights as men
a model society uses the talents of
women in the workplace light in banks
school etc and such a society which uses
the talent of women is considered as
more prosperous and modern now the third
goal of every five-year plan is
self-reliance self-reliance means
independent of others it means not
depending on external help
it helps means self-reliance helps in
reducing the interference of foreign
countries in providing us food supplies
capital investment and debts the 1st and
7 five-year plans gave importance to
self-reliance which means first a 7 year
plans focuses on avoiding import of
those goods which could be produced in
India itself fourth goal of every
five-year plan is equity equity refers
to equality equity means that economic
development achieved through above 3
goals is shared by all the citizens to
promote social justice it is important
to ensure that the benefits of economic
prosperity are reaching to the poor
sections also as well instead of being
enjoyed only by rich so in addition to
economic growth modernization and
self-reliance equity is equally
important for the growth of any
me equity aims that every Indian should
be able to meet his or her basic needs
such as food house education and health
students do not forget education and
health are also our basic needs it was a
early time when basic needs were
considered only three that were food
clothes and house but in today's world
education and health are also our basic
needs equity also aims at reducing
inequality in the distribution of Filth
so all this was about goals of five-year
plans this all was for today let us
revise what we have done today we
started our chapter with the term
economy simultaneously we compared the
economy with the term economic system
then we discussed three types of
economic systems namely capitalistic
economy socialistic economy and mixed
economy next we discussed the term plan
and importance of plan and lastly today
we did four basic objectives behind each
five-year plan namely basic goal of
economic growth basic goal of
self-reliance basic goal of
modernization and basic goal of equity
the rest we will do in our next lecture
thanks for today
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