Define economy and politics. Explain how the two social ...

[KWilfred]

Define economy and politics. Explain how the two social institutions are interrelated.
 
  What is an Ideal response?

Question 2

Compare and contrast the economic models of capitalism and socialism. Use the ideas of Adam Smith and Karl Marx in your answer.
 
  What is an Ideal response?

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Answer to Question 1

 Economy:the social institution that organizes the production, distribution, and consumption of goods and services.
 Politics:the social institution that guides a society's decision making about how to live.
 Political economy:the closely linked economic and political life of a nation or world region.

Answer to Question 2

 According to the Scottish economist Adam Smith, the pursuit of self-interest has widespread benefits because as people are guided by their self-interest, an economy ends up producing the greatest good for the greatest number of people.
 Karl Marx claimed that capitalism's private ownership of productive property is what creates unequal social classes. By putting the means of production (such as factories and other productive property) in private hands, the capitalist economy serves the interests of these owners.