GMGT 1010 Lecture 16: GMGT 1010 Lecture 16

• School: University of Manitoba
• Department: General Management
• Course: GMGT 1010
• Professor: Brock V.Cordes

Document Summary

Fewer inventions and less innovation because those who come up with new ideas usually don"t receive as much reward as they would in a capitalist system. Communism: an economic and political system in which the state (the government) makes all economic decisions and owns almost all of the major factors of production. Communism affects personal choices more than socialism does. The government has no way of knowing what to produce because prices don"t reflect supply and demand as they do in free markets. People lose the incentive to work hard as the government takes more of their earnings. Rationing mechanism of price on supply and demand does not exist therefore this creates surplus and shortages of products. Ex: your place in line for bread, dictates your willingness to buy, rather than price. Communism is slowly disappearing as a economic form. Most communist countries today are suffering server economic depression.