Comparative Economic Systems

Models and Cases

By Morris Bornstein

Seven Edition

9 Criteria for evaluating economies:

1.The level of output. The objective ordinarily is a "high" or "full-employment" level, although the quantitative expression of this target depends upon assumptions or goals regarding labor force participation rates, the length of the workweek, and frictional unemployment.

2.The rate of growth of output; for instance, the annual percentage growth rate of GNP.

3.The composition of output: the shares of consumption, investment, and military programs; collective versus individual consumption; and so forth.

4.Single period ("static") efficiency. It is achieved when no reallocation of existing resources could increase total output.

5.Intertemporal ("dynamic") efficiency. This concerns the increase in potential output attainable from additional resources of labor, capital, and land. The increase in output depends on how the incremental resources are allocated, technological progress, economies of scale, and external economies.

6.Stability of output, employment, and prices.

7.Economic security of the individual, including security of income and/or of employment.

8.Equity-involving equality of opportunity and an "appropriate" degree of inequality of income and wealth.

9.Economic freedoms of occupational choice, consumption, and property.

Directions:

Match each of the elements of comparison below to the right criteria.

1. World Happiness Report ranking (2020)

2.Economic Freedom Index (2020)

3.Tax Burdon as a % of GDP

4. Inflation

5. GDP per capita

6. GDP growth rates

7. Tariff Rate

8. Unemployment Rate

9. IMF credit received

10. Gini Index

11. Life Expectancy

12. Government spending on healthcare as a % of GDP

13. Literacy level

14. Strength of Legal Rights

15.Time required to start a business