Question

Adham is living in. a country adopting an economic system in which private individuals or businesses

own capital goods, while Nabil is residing in a country where the government state owns all capital
goods. Adham and Nabil were arguing about the advantages and disadvantages of each of the
economic systems and which system is better for managing the economic resources. Sami, is a
friend of both Adham and Nabil, and he told them that the economic system that his country is
adopting acts as a moderation between the two systems that they are arguing about and it is the
optimal svstem for manaaina the economic resources,
a- Indicate the types of economic systems presented in this case
b- Explain the advantages and disadvantages of each of the economic systems
c- Do you agree with Sami that the economic system adopted by his country is the optimal
system for managing the economic resources? Explain

Answer 1

The two economic systems presented are a market economy and a command economy. Each system has advantages and disadvantages. The optimal economic system depends on various factors and is subjective.

Step-by-step explanation:

The types of economic systems presented in this case are a market economy (capitalist economy) and a command economy (communist or planned economy). In a market economy, private individuals or businesses own capital goods, and resource allocation is determined by supply and demand in the marketplace. In a command economy, the government owns all capital goods and makes decisions about resource allocation.

The advantages of a market economy include efficient resource allocation through competition, innovation, and economic growth. It also allows individuals and businesses to have freedom of choice and the ability to accumulate wealth. However, a market economy can lead to income inequality and may not provide for basic needs for all members of society.

The advantages of a command economy include equal distribution of resources and the ability to prioritize social welfare. It can also enable the government to plan and allocate resources to achieve specific goals. However, a command economy can be less efficient, lack incentives for innovation, and have limited choices for individuals.

Sami's claim that the economic system adopted by his country is the optimal system for managing economic resources is subjective and depends on various factors. Each economic system has its own advantages and disadvantages, and the optimal system may vary based on the goals, values, and priorities of a country and its citizens.