Question

Using your responses from the previous questions, write a paragraph that explains the impact the type of economic system a country uses has on its economic health. Make sure your response contains specific facts from the CIA Factbook.

Answer 1

Countries that have minimal government interference in the functioning of the economy have higher per capita GDP. For example, in 2013, the per capita GDP of the United States was $53, 900 and the per capita GDP of North Korea was $1,800. However, minimal government interference does not guarantee a high economic growth rate. For example, in 2014, the economic growth rate of the United States was 2.4% and the growth rate of China was 7.4%. A government that has a firm hold over the economy does not give its citizens much economic freedom. But, when it slowly reduces its control, it gives the citizens an opportunity to make economic decisions that benefit the country. However, these steps may not necessarily improve the citizens’ standard of living and income. The economy might still face certain economic problems, and its per capita GDP might decline. In 2013 and 2014, the North Korean government started 20 new economic development zones, but this action did not reduce the unemployment rate, which increased from 25.5% in 2012 to 25.6% in 2013.

Step-by-step explanation:

PLATO Answer

Answer 2

Liechtenstein has a market-oriented economy, with general low levels of taxation, and a small safety net for nationals, that includes public education, and some healthcare coverage.

It is also a federal state despite its small size, this means that the municipalities inside Liechtenstein have some degree of autonomy, for example in taxation, which creates competition for investment inside the country.

The central European country only has 38,000 inhabitants, but a GDP Per Capita of 139,000 dollars according to the CIA World Factbook. What this means, is that Liechtenstein is one of the wealthiest countries in the world, and its economic system contributes to that economic health.