Advantages and disadvantages of market economy

The market advantages:

• It has an ability to satisfy enough level of demand with high level of goods

• The sellers and buyers are an independent

• It has ability to adopt quickly to any changes on the economy

Disadvantages of the market:

It only satisfies the needs of person who has money

• It is not interested in producing social goods such as roads, education system, health system, public transportation and others.

• It does not give warranty(protection) for full employment and stable income

• It doesn’t care about ecology, pollution of the environment and others

Monetary policy: essence and instruments

• “Monetary policy is essentially a programme of action undertaken by the monetary authorities, generally the central bank, to control and regulate the supply of money with the public and the flow of credit with a view to achieving predetermined macroeconomic goals”

• The objectives of monetary policy are the same as of macroeconomic policy – price stability, currency stability, financial stability, growth in employment and income

Monetary system of the country is stated in the law and it has:

• the following components, such as:

• National currency

• Cash system (coins, credit cards and money)

• System of money emission

• Government Regulation of money supply (Central bank)

 

 

ТИПТІК

Decribe the conditions of goods production formation.

There are two types of social economy. They are a natural production and a goods production.

The second type of the social economy is goods production. In the goods production the goods are made to be sold. The economic relations between people are take place throw market, that’s аhвthis sвstem has the following stages of goods movement: production-exchange-use.

The conditions of the goods production development:

1. Public division of labour(producersspecialised on making one type of

goods)

2. Private property (the results of the production are owned by holders)

The goods production was the basis of the market development. There are several types of market economy. They are:

1. Non developed market economy (the half of the production results are consumed by the producers and the others are sold on the market).

2. Developed market economy (free market economy). Such kind of market economy has peculiarities as working force is a good, the producer engage(  ) hired worker, and the most production results are sold.

3. Regulated market economy (mixed economy). Here is combined the private sector and government sector. There are several forms of the government regulations. They are issue a law, conduct a tax and finance systems of the country. Several forms of regulated market economy used in the world such as social oriented (Germany), to support a business (the USA), to protect a big business interests (Japan, Sweden)

4. Deformation market economy (administered-command economy)

 

Give definitions of the economic category. Write 5 economic category according to the alphabet

Economics: the study of choice under conditions of scarcity. This definition requires some

unpacking, to be more precise about the notions of choice and scarcity.

In economics a resource is defined as a commodity, service or other asset used to produce goods and services that meet human needs and wants. The aim of the economic system development is satisfaction the needs of a society. It defines by 5 categories:

Needs

Opportunity Cost

Resources

Scarcity

Wants

What are the difference between microeconomics and macroeconomics?

Macroeconomics and microeconomics, and their wide array of underlying concepts, have been the subject of a great deal of writings. The field of study is vast; so here is a brief summary of what each covers. Microeconomics is generally the study of individuals and business decisions, while macroeconomics looks at higher up country and government decisions.

Microeconomics

Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize its production and capacity, so that it could lower prices and better compete in its industry. Microeconomics' rules flow from a set of compatible laws and theorems, rather than beginning with empirical study.

Macroeconomics

Macroeconomics, on the other hand, is the field of economics that studies the behavior of the economy as a whole, not just of specific companies, but entire industries and economies. It looks at economy-wide phenomena, such as Gross Domestic Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by the unemployment rate.John Maynard Keynes is often credited with founding macroeconomics, when he initiated the use of monetary aggregates to study broad phenomena. Some economists reject his theory and many of those who use it disagree on how to interpret it.

Micro and Macro

While these two studies of economics appear to be different, they are actually interdependent and complement one another since there are many overlapping issues between the two fields. For example, increased inflation (macro effect) would cause the price of raw materials to increase for companies and in turn affect the end product's price charged to the public.