1. Economic environment
• Capitalist economy
• Socialist economy
• Mixed economy

2. Capitalist economy
• Depends on price mechanism
• Laws of demand and supply operate freely
• Market mechanism
• Consumers sovereignity
• Competition
• Private ownership
• Free enterprise
• Freedom of choice of occupation
• Freedom to save and invest
• Limited role of government.

3. Socialist Economy
• Government owrnership( Railways)
• Central authority(Planning )
• Restriction on consumption
• Restriction on occupation
• Fixation of wages and prices.
• Distribution of income

4. Mixed Economy
• Private , public and joint sectors are actively
involved.
• The regulatory role
• The promotional role
• The enterpreneural role
• The planning role

5. Regulatory role
• The government determines the conditions under
which they can be granted permission to enter
into business/contract/use public resources.
• Regulate the conduct of economic ventures.
• Public controls may extend to limitations of
public utility profits, ceilings on dividends ,
imposition of excess profits tax.
• Settle conflicts of interest and prevent undue
advantage of concentration of economic powers
in a few hands.

6. Enterpreneural role
• Public ownership

7. Promotional role
• Important both in developed and developing
economies.
• Infrastructural development
• Provision of fiscal , monetory and other
incentives.