Words: 1050
As part of your discussion, make reference to the Planned / Free market and Mixed economies. Rodriguez (2008) states that economic s systems deal with the relationships between production (supply) and consumption (demand). Four elements define production: * Manufacturing – the process of utilizing raw materials and making them into finished goods. * Regulation – production systems are controlled and regulated by governments. * Circulation – the transportation of finished goods and the communication link between all parties * Distribution – goods and services made available to the consumer by retailing.
Factors of production Include land and natural resources, capital and labor, with enterprise considered to be the fourth factor as he mall purpose of the organization. Income. Income can be exchanged for goods and services which enable us meet our own particular needs or wants. Resources are usually in three or four categories, as illustrated below: Figure 1 – Economic Systems Types of Economic Systems The centrally planned economy – this type of system which is associated with the post-second World War socialist economies of Eastern Europe, China and Cuba.
The central planning authority makes all decisions on production within the state. The state or its agencies control the following: * Has ownership and/or controls the main economic system * Sets the priorities in the use of resources * Controls output targets for businesses, usually under state ownership * Directs resources to meet the set targets * Co-ordinates production and controls the output rate of resources This type of economy is based within Socialist and Communist led country.
The free-market or capitalist economy is a direct contrast to the centrally planned system examples in practice are United States, United Kingdom and Japan. Private individuals or firms interact with the markets with a system of prices which determines the allocation of sources. Key features of this type of economic system are: * Resources are in private ownership * Firms, also in private ownership, make all the decisions on production and are free from state intervention * The consumer is ‘king and usually dictates the pattern of supply which influences the pattern of resource allocation.
A mixed economy is an economic system which features both market and command economy. China can be described as a mixed economy and features include: * Xx A traditional economy is a system based on customs and traditions. This economy is based on agriculture and hunting. Countries like Rwanda and Haiti are examples, the main features are: * Xx Organizations feel that production efficiency is key but economists are concerned with allocate is key and has to be efficient.
Discuss the impact of social welfare and industrial policy initiatives on two UK organizations of your choice, together with the wider community. The Social Welfare Policy exists to protect and improve the standard of living of the United Kingdom’s residents. The Auk’s Government has several agencies which have been set up to collect and re-distribute wealth to the nation, agencies include: * The Benefits Agency: assesses and delivers most Social Security benefits * The Contributions Agency: ensure compliance with the law on National Insurance, maintains contributors’ National Insurance records. Industrial Policy – The government sets policy to influence which industries are invested in via tax subsidies, enterprise allowances, deregulation which all promote who cannot benefit from a free-market. Social policies exist to be a central response to social problems, and include: * Social security * Pensions * Contributory * Job seekers allowances * Child benefit * Housing benefit Council tax The above systems have been put in place for the government to collect contributions in some areas to re-distribute to low income families to ensure all can have their basic needs fulfilled.
Social policy affects organization through workplace regulations, employment law, skills and education. Changes to social welfare payments has been introduced recently to ensure families with school age children are actively seeking employment, rather than Just drawing benefits from the system. In the I-J the government’s industrial policy ensures support for investment to encourage economic growth. A current example of the government intervening in a private organization’s policy was to buy shares in the Northern Rock Building Society to ensure they continued trading.
The government also gave guarantees to investors to stop them withdrawing their savings which would give the company less working capital. The government now has a say in how the Northern Rock is run and had an input into who they appointed to run the company. Another organization affected by social change is the BAM (2008) warns that severe staff shortages may hit the Isle of Man as a result of the Mans government’s decision to consider severing the link with he I-J NASH pension scheme.
The changes would affect health of the people of the Isle of Man and would affect the NASH coverage, including doctors, nurses and hospital services. Evaluate the impact of macroeconomic policy measures and the influence of the global economy on two I-J organizations and their stakeholders. You should make reference to fiscal and monetary policy measures. Macroeconomics is the monitoring of the performance of the economy as a whole and the government uses various policies to achieve its aims and objectives. All governments have five broad objectives that they wish to see achieved, which are:
Sustainable growth * Low inflation * Falling unemployment or full employment * Balance of payments equilibrium * Controlled public borrowing In order to achieve the above points the Government through its economic policies, aims to improve the economic welfare of the country. These policies include fiscal policy and monetary policy. Fiscal policy is made up of two elements: taxation and government expenditure. In 2007 – 2008 public expenditure plans were for IEEE billion divided as follows: any decisions to cut public expenditure have a sizeable impact on economic prosperity.
The government’s legally binding commitments, such as social benefits and education account for large areas of expenditure. Monetary policy is to control interest rates and/or supply of money. The government’s targets for money supply growth are contained within the medium-term financial strategy (MATS), a statement that sets out targets for public spending and money supply growth over the following three years. Interest rates are set in line with the prevailing economic conditions, and particularly with respect to forecasts for inflation.