Question

All though all countries throughout the world have to face similar economic problems the economic system they adopt as a means of dealing with them will differ. Essentially there are three approaches to tackling the economic problem of allocation, distribution and utilization of resources. Comment on all the three approaches and reason out which approach will work out in UAE as a country

Answer 1

SOLUTION:-

The three types of economic system are :

1. Planned economy : the economy where the decision of investment, production, allocation of captial goods take place according to economy wide economic plans and production.

2. Market economy : In this type of economy, the distribution, allocation, and utilisation of resources are controlled the market. a Here the private ownership plays a pivotal role.

3. Mixed economy : it is a system that combines aspects of capitalism and socialism. It protects the private property, and allows the government to interfere in economic activities in order to achieve the economic goals.

The UAE is a mixed free market economy based on oil and natural gas production. it's economic health is dependent upon the world price of hydrocarbons.

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