Which of the following conditions is more suitable for entrepreneurship?

Capitalist economy Lower rates of taxation on personal income Both 1 and 2 None of the above

Both 1 and 2

In general, capitalist economy with its emphasis on individual achievement is more suitable for entrepreneurship. Lower rates of taxation on personal income, lower rates of interest and moderate inflation stimulate entrepreneurial activity. Moderately low external value of domestic currency or in other words, moderately lower exchange rates, stimulate import substituting and export promoting entrepreneurship. Well developed financial system, good infrastructure, helpful bureaucracy all these have a favorable impact on entrepreneurship.