BUSINESS ENVIRONMENT

Business Environment

Business Environment

Part 1

The term economic system includes many processes like dealing with the production, distribution and circulation of various products and services. These product and services include consumer goods, infra structure, technology and various other components. Talking about the economic systems, there are three forms which are applied by the economy. Theses three economic systems includes free market economic system, centrally planned economy system and mixed economy system.

In the Free market economic system, there is very low government intervention. The system follows the price mechanism, and the supply regarding the goods and services is determined by the demand of the economy. It is considered that most of the decisions in the free market economy system are determined through the market mechanism. The issue with this economic model is that it becomes very difficult that who will meet the demand of the public by producing different goods and services.

Centrally planned economy system is basically used at the regions which are developing. The reason behind this is that because of the use of this system people will not be facing the issue of unemployment; government will be holding the majority of the rights. Government will be responsible for the allocation of the resources and all of the other economic activities.

The economy system which is used by the United Kingdom is the last one, known as mixed economic system. The reason for the adoption of this system by United Kingdom is globalization. The name Mixed economy itself suggests that this system is the mixture of all the other economic systems. The benefit of this system is that it provides the opportunity for both the government and the private sector to use the economic resources. The benefit of this economic system is that when the private sector fails to meet the demand, government ...