Профессиональная подготовка на английском языке (стр. 3 )

Economic systems – экономические системы

Planned Economy – плановая экономика

Market Economy – рыночная экономика

Mixed Economy – смешанная экономика

Traditional Economy – традиционная экономика

Pursue – преследовать; следовать неотступно за; гнаться; бежать за.

Subsidize – субсидировать, финансировать, дотировать, ассигновать

Lecture 1

Introduction into Economics

Economic systems

What is economics about?

We first set out some basic terminologies, methodologies, and assumptions used in modern economics in general and in this course in particular.

The word economy comes from the Greek word for “one who manages a household”. At first, this origin might seem peculiar. But, in fact, households and economies have much in common.

A household faces many decisions. It must decide which members of the household do which tasks and what each member gets in return: who cooks dinner, who gets the extra dessert at dinner, who does the laundry. In short, the household must allocate its scarce resources among its various members, taking into account each member’s abilities, efforts, and desires.

Like a household, a society faces many decisions. A society must decide what jobs will be done and who will do them. It needs some people to grow food, other people to make clothing, and still others to design computer software. Once society has allocated people (as well as land, buildings and machines) to various jobs, it must also allocate the outpurs of goods and services that they produce.

The management of society’s resources is important because resources are scarce. Scarsity means that society has limited resources and therefore can not produce all the goods and servises people wish to have.

Economics is the study of how society manages its scarce resources. In most societies, resources are allocated not by a single central planner but through the combined actions of

much they work, what they buy, how much they save, and how they invest their savings. Economists also study how people interact with one another. For instance, they examine how the multitude of buyers and sellers of a good together determine the price at which the good is sold and the quantity that is sold. Finally, economists analyze forces and trends that affect the economy as a whole, including the growth in average income, the fraction of the population that can not find work, and the rate at which prices are rising.

Economics is a social science that studies economic phenomena and the economic behaviour of individuals, firms, government, and other economic units as well as how they make choices so that limited resources are allocated among competing uses. Because resources are limited, but people’s desires are unlimited, we need economics to study this fundamental conflict.

Four basic questions must be answered by any economic institution:

(1) What goods and services should be produced and in what quantity?

(2) How should the product be produced?

(3) For whom should it be produced and how should it be distributed?

(4) Who makes the decision?

The answers depend on the use of economic institution. There are two basic economic institutions that have been used in reality:

(1) Market economic institution: Most decisions on economic activities are made by individuals, it is mainly a decentralized decision system.

(2) Planning economic institution: Most decisions on economic activities are made by government, it is mainly a centralized decision system.

Microeconomics and macroeconimics

The field of economics is traditionally divided into two broad subfields. Microeconomics is the study of how households and firms make decisions and how they interact in specific markets. Macroeconimics is the study of economy-wide phenomena. A microeconomist might study the effects of rent control on housing in London, the impact of foreign competition on the U. K. auto industry, or the effects of compulsory school attendance on workings’ earnings.

A macroeconomist might study the effects of borrowing by the federal government, the changes over time in the economy’s rate of unemployment.

Microeconomics and macroeconomics are closely interwined. Because changes in the overall economy arise from the decisions of millions of individuals, it is impossible to understand macroeconomic developments without considering the assosoated microeconomic decisions. However, because microeconomics and macroeconomics address different questions they sometimes take quite different approaches.

Microeconomic theory aims to model economic activity as an interaction of individual economic agents pursuing their private interests.

Normative versus positive analysis

There are two approaches that can be used by economists. These are positive and normative statements. Positive statements are descriptive, they make a claim about how the world is. A second type of statement is normative. Normative statements are prescriptive. They make claim about how the world ought to be.

A key difference between positive and normative statements is how we judge their validity. We can, in principle, confirm or refute positive statements by examing evidence. Positive and normative statements may be related.

Positive ·  No asking ·  Just asking how the economy operates

Normative ·  Makes judgements ·  Evaluates the outcomes of economic behaviuor ·  Policy recommendations

Positive: economic policy starts with positive theories and model to develop and understanding of how the economy works.

Then economic policy evaluates (normative) on the basis of:

·  Efficiency (is the economy producing what people want at the least possible cost

·  Equity (is the distribution of wealth fair?)

·  Growth (increase in total output of the economy)

·  Stability (steady growth, low inflation, full employment of resources – capital and labor)

And recommends (normative) courses of actions to policy-makers (government).

Economic systems

Since goods do not stay in the posession of one person, and are created and consumed, the system by which goods move is very important to anyone who wants to get goods they don't already have. There are two extremes of economic systems, Planned Economies and Market Economies

• Traditional

• Command

• Market

• Mixed

Planned Economies

A pure planned economy is one where some person or group tells everyone what to do with their goods; people all work together, and the goods and services that are produced are planned, and distributed, by the government. These are sometimes known as Command Economies, because everyone is told what to do. The motive of such an economy is to make sure that everything that people need is produced, and that everyone gets what they need. This type of economy was first conceived as a Communist idea, where the workers would be able to control the system. The main drawback of such a system is that the person or group that plans the economy must know, in advance, exactly what should be produced; otherwise, people will not have enough of some goods. Planned economies have no unemployment, and no essential needs normally go unfulfilled; the government knows how much food will be needed, and how much medicine, etc. so they should be able to provide them. Realistically, however, these systems tend to suffer from large inefficiencies, and are not as sucessful as other types of economic systems.

Command

·  Government controls the means of production and distribution

·  Centralized decision making. Government makes all economic decisions

·  Little or no competition

·  Businesses are not run for profit

·  Non-labor factors state owned

·  Centralized information

·  C

·  oordination by plan

· 

Market Economies

A pure market economy is one in which no-one is told what to do, or how to do it. Everyone is left on their own to decide what to produce, who to work for, and how to get the things they need. This type of economy, though it seems chaotic, allows for people to change what they do if they see that they could be successful at them.

Market economies can have problems, for instance, if there is a good that is an absolute necessity for some people, but no-one in the market is interested in making it. For instance, in the United States, in 2000, there was a shortage of tetanus vaccine; it was expensive to make, and one of the two companies that had made it previously went bankrupt. Since it takes 11 months to add production, there was a significant shortage until the other company was able to increase production. In a planned economy, this should not happen, because the government would not stop making the vaccine unless it was not needed.

Market economies also have unemployment, and some people will not be able to make enough money to provide for all of their needs. On the other hand, the market tends to be more efficient (for reasons that will be discussed later) and people have more opportunity to do the jobs they want, and to profit by them.

Market

• Means of production are privately owned

• Supply and demand are the main factors in economic decisions

• Individuals can own their own property and go into business for themselves

• Individual profit is the primary motivator

• Competition for business

Mixed Economies

Most modern economies do not use either of these systems, and instead have some features of both. Usually they have a free market, but the government owns some businesses, and provides some goods and services to the citizens. Mixed economies attempt to take the benefits of both systems; they may subsidize industries, rather than actually own them. This means they provide benefits, such as tax breaks or other incentives, so that the industry will remain profitable. Similarly, Mixed goverments may have government owned hospitals and medical services, so that all citizens can use them, but allow other parts of the economy to run on their own, so that inefficiency is minimized, and people can have the jobs they want.