Essay on econ stuff

Submitted By chamacaflaca
Words: 1623
Pages: 7
Open Document
Types of Economic Systems
What do we mean by “types” of economic systems?
Economic systems are the mechanisms used by societies to answer the basic economic questions such as:

1. What goods are to be produced?

2. How to produce these goods? That is, what production technique should be used in the creation of the desired goods? And what specifications should be incorporated into the product? For whom to produce? That is, for which group of individuals are the goods to be produced for & distributed to?
How much to produce? How much of a good should be produced & supplied to society?

At what price should a good be supplied or sold?

Types of Economic Systems
There are 4 basic types of economic systems which can be adopted by societies to answer the production questions.

2 of the 4 systems are polar opposites of each other:

“Free market” economy (capitalism) vs.
“Planned” economy (socialism)
Types of Economic Systems
The other 2 systems lie somewhere in-between the “market” and “planned” systems. They are the:

Mixed economy
Some industries are owned or controlled by government while the rest is controlled by private individuals or the private sector.

Indicative planning economy
Government is market-friendly and encourages private enterprise, but will “tweak” market outcomes to support its industrial policy.

Economic Systems Differ Along 3 Dimensions
Decision-making: Who controls/owns the resources? Government? Private Sector? Or both?

System of incentives used to motivate individuals

Material incentives Moral Persuasion Coercion

Nature and extent of individual rights

Freedom of mobility & employment
Ownership rights – or the right to own assets.
Private Property Rights: a) control rights b) cash-flow rights c) disposal rights d) access to legal recourse if private property is stolen, confiscated, vandalized or damaged. 1. Decision-Making: Who Decides? Who decides what to produce, how to produce, for whom to produce, how much… and at what price?

In a free market, capitalist economy, decision- making is decentralized down to the level of the private individual, and across all of the households and businesses within the economy.

In a planned or socialist/communist economy, decision-making is centralized or under the control of government “central planners” or a “central planning authority.”

Decision-making: Who decides?
In a mixed economy, government controls some of the resources and industries, while the private sector controls the rest. Government decides how to use the resources it controls… in turn, the private sector decides how to use the resources it controls.

In an indicative planning economy, the government believes in private ownership, so enterprises are “privately-owned”. However, the government has an industrial policy with “vision.” It targets certain industries for rapid growth & expansion and then “woos” business leaders into reallocating their assets into these industries. There is no coercion involved. The wooing of businesses is based on an uncoerced, voluntary consensus between the business leaders and government.

Measuring differences among economic systems
Ways of classifying and measuring the economic performance of economies

1. Degree of Economic Freedom
The economic freedom index assesses how “free” a society is from government involvement or control over the economy.

The freedom index number is computed by assessing the performance of the economy on each of the following 10 dimensions.

1. Trade policy 6. Banking policy
2. Taxation policy 7. Wage and price controls
3. Government spending 8. Property rights
4. Monetary policy 9. Regulation policy
5. Foreign investment & capital flows
Show More

Related Documents: Essay on econ stuff

Why Does High Finance Need Network Of Cities?

consumption—wages mattered because they created effective demand. 3. High wage levels and social benefits became model for broader sectors of the economy. What is the impact of the ascendance of finance and producer services on the broader social and econ structure of major cities? And what are the consequences of the new urban economy on the earnings distribution of a city’s workforce? Unskilled workers have become excessive for new advanced sectors Not necessarily an impact of the ascendance, but…

Words 1652 - Pages 7

Humanities Review Essay

Rome, Greece, Islam, Fall of Classical Civs Review by Kat Kabel and Nicole Levy Humanities Greek and Roman Architecture Styles ● Doric ○ ○ ○ ○ ○ ○ most unadorned style sturdy, dignified, masculine no base tapered shaft entasis (fatter in the middle so they look straight) 20 flutes ■ ex: Parthenon ● Ionic ○ slender, graceful, ornate, feminine ○ volute on capital (look like Princess Leia buns) ○ tiered base ○ slimmer ○ shaft not tapered ○ 24 flutes on columns ● Corinthian ○ most popular in Rome…

Words 2657 - Pages 11

Essay Econ 301 Mircoeconomics Notes

Ch. 1 Normative Analysis: How you want things to be / How things “should” be. Positive Analysis: A factual statement / What is. Arbitrage: An opportunity to make risk-free money. (ex: borrowing money at 1% and lending at 5%) If markets are working efficiently there should not be any arbitrage. Calculating Growth Rate: (H2/H1 - 1) x 100 Establishes a difference between Real vs. Nominal numbers. Ch. 2 How to calculate a curved slope using a derivative:…

Words 1275 - Pages 6

in defense of globalization Essay example

argument backed by extensive research, but also because it is immensely readable and surely the most humorous piece of economics ever written." -- Hernando De Soto Humorous? While I respect De Soto, I wonder whether we both read the same book. Econ humor? Here's a joke: I recall particularly the Cambridge Union Debate, where, astonished that free trade being blamed for environmental problems and other ills in the world, I replied to Teddy Goldsmith by recalling Balzac's 1831 novella ... "Mr…

Words 1564 - Pages 7

Essay on Weekly Course Outlines

Week 1 The First Modern Capital Markets Commercial Revival of the Middle Ages and Renaissance, 1000-1500 Business org: guilds, regulated associations (eg, Merchants of the Staple) Partnerships and shares Bancos to banks (Italy: deposit/discount, merchant, and pawn banks) Bills of exchange European Discovery of the New World The Price Revolution Spanish/Habsburg dominance of 16th C Long-term annuities Rise of Dutch Republic, late 16th & 17th centuries Dutch financial innovations Public debt Securities…

Words 3872 - Pages 16

Final Study Guide Essay examples

STUDY GUIDE FOR EXAM #4 11 December 11:30 U.S. History 10613 -People in BLUE -Non us people are in -Military events in Green Battles = normal green Wars will be in this green Military idea and weapons are in -Domestic affairs like polices based and for us citizens in red -U.S Forein polices and affairs in pink -Other countries forein affairs are in brown -elections will be in orange -president Administrations and scandals is in purple Bataan Death March -The…

Words 3540 - Pages 15

Essay about Econ 1 8 27

ECONOMICS 1 Professor Martha Olney 08/27/12 Lecture 1 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley. Do not share, copy, or illegally distribute (electronically or otherwise) these notes. Our student-run program depends on your individual subscription for its continued existence. These notes are copyrighted by the University of California and are for your personal use only. Outline – August 27, 2012     Administrative Miscellanea Administrative matters…

Words 3803 - Pages 16

Essay on Mini Case Study

Writing Assignment 2: Mini Case Analysis ECON 634 Bangalore, Dec/Jan 2009/10 100 Points Due Date: Tuesday Jan 5 at 1pm; 25 point penalty per day late This is a team-based writing assignment. My strongly preferred team size is four, but I will consider team sizes of three or five on a case-by-case basis. Your assignment is to Read the Harvard Business Review short case study “Class- or Mass”. Write an analysis of the case following this outline (submit one report for your entire team):…

Words 4104 - Pages 17

ECON 7200 Economic Principles M Semester 2 2013 Course Profile DUFE Essay

ECON 7200 Economic Principles (M) DUFE 1. General Course Information 1.1 COURSE DETAILS Course: ECON 7200 Economic Principles (M) Coordinating Unit: School of Economics, Faculty of the Professions Teaching Period: Semester 2 Year: 2013 Mode: Internal Level: Postgraduate Coursework Location/s: DUFE Units: 3 Contact: 4 hours per week Prerequisites: Not applicable Co-requisites: Not applicable Incompatible: Not applicable Assumed Knowledge: Not applicable Restrictions: Available to M Commerce…

Words 6839 - Pages 28

Ethics Of Travel And Tourism

•UTTERWORTH I'I~E [NEMANN 0 26 I-5177(95)00015- I Tourism Management, Vol. 16, No. 4, pp. 26.3-268, 1995 C opyright © 1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0261-5177/95 $10.00 + II.00 C urrent issues B usiness ethics and tourism: from m icro to macro perspectives A lf H Walle Travel and Tourism Program, University of Nebraska, West Center C226, Kearney, NE 68849, USA Business ethics is a complex field which the tourism industry must understand…

Words 5071 - Pages 21