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Economic Transition: Comparison of two countries

Corporations entering new countries find different political and economic systems. Some systems change rapidly, others change slowly. In either case, trying to do business in such a situation is no small accomplishment.

Tasks:
Select two countries of interest and answer the following questions:
Are these developed, industrializing, or developing countries?
Which type of economic system exists in these countries? Compare and contrast your findings for the two countries.
When did the countries adopt their current economic systems?
Has either country undergone any form of economic transition in the past 15 years? If yes, what are the effects of the transition on the culture and political, legal, and economic systems of the country? If not, what forces prevented the transition?

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Solution Preview

Economic Transition

Introduction

An economic system is the structure that controls and guides allocation of inputs in an economy, production, distribution of outputs in an economy, and consumption of the goods produced in within the economic system. This paper analyses economic systems of China and the United States.

Analysis

United States of America is a developed country and became so in the 1900s. The country has a high productivity ratio, well developed infrastructures and institutions and high Human development index (Wright & Czelusta, 2007). China on the other hand is a Newly Industrialized country and has in the recent past decades, undergone rapid economic growth and development (Bozyk, 2006). This country not only has strong foreign investments and increased civil rights and social freedoms, but also most of jobs in developed countries are often outsourced in these countries.

United States of America has a mixed capitalistic economic system, with it leaning more on capitalistic tendencies. A capitalistic economic system is one in which production activities are primarily done to optimize profits and capital accumulation. In a mixed economy though, the economy combines capitalistic tendencies with socialistic tendencies where the government does not interrupt capitalists who want to make profit, instead encourages them, but at the same time the government cares for society welfare through provision of benefits such as unemployment benefits. China on the ...

Solution Summary

Comparison of two countries for economic transitions are examined.

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