Essay About Faculty Of Business And Economic System

Capitalism and Advantages
[pic 1]FACULTY OF BUSINESS AND MANAGEMENT Accounting Theories & Pratices (BD)ASSIGNMENT 1 (CAPITALISM) by      Name : Nur Zaleela Binti Abdullah (01-201409-00039)  Prepared for: Mdm. AsbariyahDate Submission: 7th August 2015Definition of Capitalism        Capitilism refer to an economic system in which investment in and ownership of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, especially as contrasted to cooperatively or state-owned means of wealth. Its also defined as an economic system where individuals own economic resources and make decisions relating to their own self interest. This economic system is also known by other names, such as a free market or “laissez-faire” economy. Business owners often find more success in capitalistic economies because private ownership allows individuals to produce various goods or services and keep business profits for themselves and the government cannot intervert the business. It includes significant amounts of competition to improve the quality and quantity of consumer goods and services. Entrepreneurs must find ways to differentiate themselves from other companies to gain significant market share levels. Competition is a natural result of a capitalistic society. Larger companies often dominate capitalistic economic markets. However, smaller companies may be able to slowly eat away at these organizations stranglehold by developing new goods or services to meet consumer demand. In simple meaning, goods and services are distributed according to price mechanism (as opposed to government price control) which is mean it is lack government intervention.  As an example, France where the government spend 50% of GDP has an economy which may be considered to be primarily ‘free market’. There is no clear cut point when an economy stops being capitalist and becomes a ‘mixed economy’. There are few characteristics of capitalism which are right to own property, make own profit, economic freedom, least government intervention, ownership of factor production.