Question

Explain the demerits of socialist economy.

Answer 1

Answer:

Disadvantages of socialism include slow economic growth, less entrepreneurial opportunity and competition, and a potential lack of motivation by individuals due to lesser rewards.

Answer 2

ANSWER

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The demerits if socialist economy are as follows :-

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1.No incentive for hard work :-

One of the greatest demerit of socialism is that there is no incentive for hard work. In this the people are simply made to work according to the decesions of the central authority.

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2.Loss of freedom :-

In this kind of economy, private enterprises have no place. Likewise the consumer's preferences and choices have no importance in the economy.

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3.Red-tapism :-

Since all activities under socialism are performed by the government and it's officials, there is a great possibility of delay and wastage of time for performing different tasks.

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4.Concentration of economic power :-

Socialism leads to concentration of both political and economic power in the hands of the government.Government has absolute authority in the country.

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