Question
Describe the meaning of the following terms:
Industrial Revolution, Capital, Capitalism, Socialism, Protective Tariff, Laissez Faire.
Solution
1. Capital: Capital means wealth, which is used to establish a factory to instal machinery, to purchase raw material for production and organisation for the sale of production.
2. Capitalism: It is a system of society. Under capitalism, the instruments and the means by which goods are produced are owned by private individuals and the production are carried out for making profits.
3. Socialism: Socialism means complete reordering of society for improvement in the living conditions for all the people.
4. Protective Tariff: Protective tariff means the high tax that is required for payment on important goods. The levy of tariffs protects infants industries.
5. Laissez Faire: Laissez means the policy of non-interference by the Government in the matter of trade. Adam Smith advocated the theory in 1766. According to this theory, the government should place any restrictions on trade. He advocated free trade policy.
