Indian Economy Questions

Laissez-faire is simply a way to describe a government's hands-off approach to economic policies. This approach was particularly prevalent in the United States at the turn of the 20th century, which led to numerous issues within American manufacturing.

There are many outcomes of laissez-faire economic policies. Some of the outcomes of laissez-faire economics were:

* Businesses pay workers low.

* Pollution of air and water.

* Poverty traps that cannot be escaped through free choice. 

* General glut that results from overproduction or underconsumption

* Monopoly power that emerges naturally in the market and allows businesses to exploit consumers. 

* Exploitation of the working class that pushes wages down to subsistence and compels laborers to work in harsh and unsafe conditions. 

* External economies that generate situations where desirable goods are underproduced on the market, and undesirable goods are overproduced on the market. 

* Public goods that are not supplied by the market due to free-rider problems.

A command economy types of government decide which goods would be produced without any interference of the public.

Command economy ran in Germany during the rule of Adolf Hitler. 

A command economy tends to exist under a socialist government that provides a lot of regulation.

The basic concept in economics is that all resources are limited.

A master plan is devised for long-range goals.

Economic resources are those goods and services that can be converted into valuable products for individual and business purposes.

There are four major types of economic resources:

1. land,

2. labor,

3. capital and

4. entrepreneurship.

Land and labor are natural and human resources, while capital means physical resources or money.

Entrepreneurship converts these resources into usable goods.

However, resources have finite values, and proper utilization depends on economic systems and economic decisions.