Answer to Question 1
Socialism is an economic system characterized by public ownership of the means of
production, the pursuit of collective goals, and centralized decision making. Ideal
socialism has three distinctive features: (1) Public ownership of the means of
productionin a truly socialist economy, the means of production are owned and
controlled by a collectivity or the state, not by private individuals or corporations. (2)
Pursuit of collective goalsideal socialism is based on the pursuit of collective goals,
rather than on personal profits. Equality in decision making replaces hierarchical
relationships (such as between owners and workers or political leaders and citizens).
Everyone shares in the goods and services of society, especially necessities such as
food, clothing, shelter, and medical care, based on need, not on ability to pay. (3)
Centralized decision makinganother tenet of socialism is centralized decision making.
In theory, economic decisions are based on the needs of society the government is
responsible for aiding the production and distribution of goods and services. Central
planners set wages and prices to ensure that the production process works. When
problems such as shortages and unemployment arise, they can be dealt with quickly
and effectively by the central government.
Answer to Question 2
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