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TOPIC ECONOMY Wht is system System is something tht is mde of prts tht interct

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QUESTIONS TO THE TOPIC ECONOMY

  1.  What is a system?

System is something that is made of parts that interact. If to speak about scientific definition, a system is an organized or complex whole – an assemblage or combination of things or parts performing as a complex or unitary whole.

  1.  Explain the concept of wholism.

This means that the system should be considered as a functioning whole. Changes in parts of the system and in the functioning of elements of the system should be considered from the standpoint of the system’s overall performance.

  1.  Explain the concept of interdependency.

If a change occurs in one part or set of parts, it affects all other parts of the system. This affect on each part may be direct or indirect.

  1.  Explain the concept of synergism.

This refers to the interactive effect of the parts of the system working together. The actual interaction of the parts creates an effect which is greater than the effect of the parts acting separately.

  1.  When did economics as a science emerge?  Why then? Give the definition of economics.

In the 1500s there were few universities that taught Latin, history, Greek, philosophy, religion, and mathematics, but they didn’t teach economics. During the age of Enlightenment (about 1700) God was the explanation of why things were the way they were.

More knowledge of the way things were was required, and it expanded so rapidly that it had to be divided into categories. Philosophy was subdivided into science and philosophy and then the sciences were split into natural and social sciences.  In the late 1800s and early 1900s social science itself split into such categories as economics, political science, history, geography, sociology, anthropology, and psychology. But before economics as a science was subdivided (in 1776), Adam Smith wrote “The Wealth of Nations”, where some economic terms were codified.

Economics is the study of the production of wealth and the consumption of goods and services in a society, and the organization of its money, industry, and trade.

  1.  Name some outstanding economists. Dwell on the contribution of one of them into the economic science.

The 18th and 19th centuries are proud of the names of persons who were called Classical economists: Adam Smith, Thomas Malthus, John Stuart Mill, David Ricardo, and Karl Marx. In the late 1800s Alfred Marshall published the book “Principles of Economics”. In this book Marshall presented other social sciences in evidence and changed the question economists ask. He focused on a graphical supply-demand framework, so he began a new stage: neo-classical economics. But then Marshall’s analysis was downplayed. The work of formal economists (Leon Walras, Francis Edgeworth, and Antoine Cournot) was considered as basic.

  1.  What is an economic system?

The economic system is the system that a society uses for allocation and distribution of scarce resources.

  1.  Who makes decisions what to produce and how much in private enterprise system and in command economy?

Private enterprise means that decisions about what and how much to produce are left to the discretion of owners and managers. In controlled economies such decisions are the responsibility of some governmental agency.

  1.  What instrument plays the function of resource allocation in private enterprise system?

In a private enterprise this function is basically performed by the price mechanism. This simply means that demand for and supply of goods and services interact to set their market price.

  1.  Is the governmental interference with the economy always undesirable?

Of course, there are many beneficial services and protections available from government. The question then is a matter of degree. Irrespective of the form of economic order, it performs certain valuable functions in the life of organizations of all types.

  1.  What is the system of distribution based on?

A major part of this system is credit or extended methods of payment. The system of distribution links the chain from the supplier of raw materials to the consumer.

  1.  What do economic goals for a nation usually include?  Explain each of them.
  2.  Price stability. It promotes the efficient allocation of resources, long-term planning.
  3.  Full employment. Jobs are available for those who need it.
  4.  Economic growth. Increase in the overall well-being.
  5.  Equitable distribution of income. Income is divided in a fair way.
  6.  Why are economies becoming more complex nowadays?

An understanding of how an economy works is more important than ever before. Production is taking place, goods and services are being allocated, and a great number of market participants are being motivated by a diverse set of goals. In addition, there is the complex financial system in which individuals, firms, and governments borrow and lend funds.

  1.  What is the main branches of economics?

Economics is divided into two major branches: macroeconomics and microeconomics. Macroeconomics is the study of behavior of the economy as a whole with emphasis on the factors that determine growth and fluctuations in output, employment, and the level of prices. Microeconomics is the study of behavior of individual units within the economy.

  1.  What does macroeconomics study?

Macroeconomics studies broad economic events that are largely beyond the control of individual decision makers. Specialists in macroeconomics are particularly interested in understanding those factors that determine inflation, unemployment, and growth in the production of goods and services.

  1.  What does microeconomics deal with?

It deals with all firms, households, and other institutions in the economy.

  1.  How do two branches of economics interact?

These two approaches and the topics they include are in fact interdependent. Individuals and firms make their decisions in the context of the economic environment, which has an impact on the constraints the decision makers face as well as their expectations about the future. At the same time, when taken as a whole, their decisions determine the condition of the overall economy.

  1.  What is macro environment?

Macro environment is the network of systems composed of culture, political and economic forces, technology, skill mixes, and consumer groups; a source of opportunities and constraints for the organization.

  1.  Why is macro environment a source of constraints and opportunities for an organization?

Every organization exists within an extensive and complex environmental network. Organizational environment refers to all groups, norms, and conditions with which an organization must deal. Once the organization has built its product or defined its service, it must distribute it to consumer client groups who have wants and needs that they attempt to satisfy through the consumption of such products and services.

  1.  What is culture and how does  culture affect businesses?

Culture is a composition of values, norms, artifacts, and accepted behavior patterns. All of the decisions made in an organization are culture bound; i.e., they are a reflection of all these components of culture.

  1.  What elements does political system consist of and how does it influence business organizations?

National, state, and local laws, regulations and ordinances, governmental services, political parties and processes. Political system also is the source of a rich variety of services for the organization. These services range from fire and police protection to the provision of recreational areas. Although there is an element of restriction  originating from the political sector, it is by no means dominant. By knowing that all similar organizations must observe the same rules and regulations, managers can experience an element of certainty in their activity. They know that they have a source of protection and redress when violations do occur.   

  1.  What is economic system concerned with?

It is concerned with resource availability and means of allocation, market structure and economic regulations. Economy can verify from private enterprise to planned economy. But whatever form it takes, the economic system is linked with the allocation and distribution of scarce resources.

  1.  What is the organization success measured by?

It can  be safely stated that organization success is measured by the ability of the organization to adjust to and to employ technological innovations. Among their responsibilities, managers today must count the obligation to maintain a spirit of creativity and ingenuity among members so that continued progress on the technological front can be made.

  1.  What does skill mix include?

Labor availability by skill and geographic area, mobility, training and development, unionization.

  1.  Who are the ultimate arbiters of the organization’s success?

The consumers are the ultimate arbiters of the organization’s success, for it is they who make the critical choices to consume or not to consume an organization’s output. Without the income (in whatever form) that results from this consumption, the organization is doomed to a relatively short life.  

  1.  What is the most influential element  of the business environment?

The consumers, because without the income (in whatever form) that results from this consumption, the organization is doomed to a relatively short life.  

  1.  What elements of the environment can people control and influence?

I think people can control and influence all the elements, because the subjects of economics are people, consumers. And other people work for them: providing labor resources(skill mix), or creating technology, or culture, or being political forces.




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