ECONOMY

Economic problems and economic systems

Economic problems and economic systems

Economic systems

Allocation of scarce resources

Allocation of scarce resources plays an important role in the economic system. In today's world it is observed that there are many resources which are in scarcity. The scarce resources are very much necessary to be allocated at the suitable place otherwise there is a big danger of wastage of those resources. For the developing and developed countries the scarce resources are equally important.

These resources are somehow in little quantity but they are considered to be the most precious resources. In almost all types of economic systems the allocation of scarce resources is very much important and considered to the substitute strength for the economy of the country. Due to limited option and availability of resources, there are very much limited choices for the allocating authorities to allocate the resources which are in scarcity.

Effective use of resources

In the economic system the effective use of the resources are very much important. Every country is gifted with some range of resources which are helpful and supportive for the growth of economy of any country. The development and sustainability of the country largely depends upon the use of resources. For example, the country which is rich in oil and petroleum resources has more responsibility to manage its resources.

The country needs to use its resources effectively in order to gain economic benefits from these resources. There are many evidences which can prove the fact that the effective use of resources is very much essential for the economic growth of the country and it is the main determinant of the country's development and sustainability.

Mixed economic system

Mixed economic system is one of the most important economic systems which prevail in most of the countries in the world. At present, the world is seeking for an economic system which can be very much helpful and supportive to develop and sustain the economic growth. The goals that a mixed market economy is trying to accomplish are economic freedom, economic efficiency, economic equity and economic security. These are all advantages for economic success.

The advantages are very numerous. The biggest advantage is the economic freedom the citizens have. Buyers and sellers have the freedom of voluntary exchange. Buyers and sellers freely decide whether to complete transaction of not. Another advantage is the competition from other business. The competition between companies creates a variety of advantages from consumers. The prices get lowered and there is more variety. The competition between businesses creates economic efficiency.

Using resources efficiently produces more products and fewer wastes creating a larger profit. Another advantage is economic equity; this prevents discrimination in the work place. Economic security is an advantage as well. This protects people with disabilities or retirees. Also, there is a high degree of customer satisfaction because of the freedom of the citizens and the people can adapt to changes.

The government in a mixed market economy is limited but not as much as that in a market ...