Economy

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An Economy is a social system composed of economic transactions (production, distribution and consumption of goods and services) within a particular societal region.



References

2013

  • http://en.wikipedia.org/wiki/Economic_system
    • An economic system is a system for producing, distributing and consuming goods and services, including the combination of the various institutions, agencies, consumers, entities (or even sectors as described by some authors) that comprise the economic structure of a given society or community. It also includes how these various agencies and institutions are linked to one another, how information goes between them, and the social relations within the system (including property rights and the structure of management). A related concept is the mode of production.

      Among actual economic systems, distinctive methods of analysis have developed, such as socialist economics and Islamic economic jurisprudence. Today the dominant form of economic organization at the global level is based on capitalist mixed economies.[1]

      Economic systems is the category in the Journal of Economic Literature classification codes that includes the study of such systems. One field that cuts across them is comparative economic systems. Subcategories of different systems there include:

      • planning, coordination, and reform
      • productive enterprises; factor and product markets; prices; population
      • public economics; financial economics
      • national income, product, and expenditure; money; inflation
      • international trade, finance, investment, and aid
      • consumer economics; welfare and poverty
      • performance and prospects
      • natural resources; energy; environment; regional studies
      • political economy; legal institutions; property rights.[2]
  1. * Paul A. Samuelson and William D. Nordhaus (2004). Economics, McGraw-Hill, Glossary of Terms, "Mixed economy"; ch. 1, (section) Market, Command, and Mixed Economies.
    * Alan V. Deardorff (2006). Glossary of International Economics, Mixed economy.
  2. JEL classification codes, Economic systems JEL: P Subcategories
  • (Wikipedia, 2013) ⇒ http://en.wikipedia.org/wiki/economy Retrieved:2013-12-26.
    • An economy or economic system consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individuals, businesses, organizations, or governments. Transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency.

      In the past, economic activity was theorized to be bounded by natural resources, labor, and capital. This view ignores the value of technology (automation, accelerator of process, reduction of cost functions), and creativity (new products, services, processes, new markets, expands markets, diversification of markets, niche markets, increases revenue functions), especially that which produces intellectual property.

      A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions.

      A market-based economy is where goods and services are produced without obstruction or interference, and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency and at some free market or market clearing price. Capital and labor can move freely to any area of emerging shortage, signaled by rising price, and thus dynamically and automatically relieve any such threat. Market based economies require transparency on information, such as true prices, to work, and may include various kinds of immaterial production, such as affective labor that describes work carried out that is intended to produce or modify emotional experiences in people, but does not have a tangible, physical product as a result.

      A command-based economy is where a central political agent commands what is produced and how it is sold and distributed. Shortages are common problems with a command-based economy, as there is no mechanism to manage the information (prices) about the systems natural supply and demand dynamics.