ISL201 Assignment 2 Solution Fall 2018
ISL201 Islamic Studies

Assignment 2 Solution

Semester: Fall 2018


1. Equal Distribution of Wealth
The main problem of modern economic system is unequal distribution of wealth which is the
main cause of social and economic problem. Islamic economic system solves this problem with
zakat in a good manner. Once government implement zakat, it will automatically solve the
problem of unequal distribution of wealth because the rich people will give zakat to poor for

2. Circulation of Wealth
To gain economic development it is very important that any country’s capital should circulate
instead of accumulation. If capital goes towards accumulation the economic activities will
become slow. Zakat is the best tool to circulate the money in economy.

3. Economic Stability
Zakat avoids interest system. When the economy is prosperous the amount of zakat increases
among poor. All these bring a balance in economic condition.

4. Solution for Unemployment
The basic reason of unemployment is the shortage of an effective demand. It is zakat through
which unemployment decreased by increasing the level of effective demand. In Islamic
economic system unemployment allowance can be given to unemployment persons.

5. Capital Formation
Some people avoid using their income. Neither they take benefits of nor is any other person to do
so interest system, an attempt made to decrease their accumulation through interest. But in
Islamic economic system there is no such room for the circulation of their accumulation except
Zakat that discourages the accumulation of wealth.

6. Important Instrument of Fiscal Policy
There are three basics of government finance tax, expenditure and national loan. In Islamic
economy zakat is an important essential of government finance.

7. Protection of Needy Persons
There are different people living in a society, there are some people unable to earn and depend
on other for financial help through zakat. Such can be honorably protected with necessities of

8. Absolute Source of Government income
Islamic state is a welfare state that has to fulfill the responsibility of the society. For the
fulfillment of this duty there should be surety of National Income.

9. Increase in Collective Welfare
Another economic advantages or benefit of Zakat is that it is the most basic source of social
welfare. In Islamic society zakat funds can be utilized in school and hospitals to help poor. This
promotes collective welfare of the society.

10. Illiteracy
The poor families cannot educate their children properly, who, accordingly, resort to Child labor
or fall in the hands of mischief mongers. Thus, they create many Problems for the area they live in.

Social Impact of Zakat
Islam concentrates on the reform of individuals, who are constituents of a society. Usually all the
Islamic commands start from the individual and travels to the Establishment of an ideal
community of the people. It is quite a natural process of Positive change. Zakat, in the same way
at first builds character of an individual and Then brings a lot of impacts to the society.

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