1. Introduction
A systematized approach in which a government or nation distributes its resources and apportions goods and services in the national community. The economic system can consist of the different ways that the workforce is organized and how it is rewarded or motivated. In addition it would include the whole process of producing and allocating goods.
In these systems there are elementary concepts that a person should think about and consider which include the political circumstance, tradition, and even the environment production of these goods or services.
2. Economic Systems
a. Traditional economy
A traditional economy is a system whereby customs, tradition, inheritance and belief systems establish how to retort the three economic questions. In this system only a limited amount of specialization and diminutive trade occurs. People tend to live in family groups, and these families produce most of their own food, make their own houses, collect their own fuel (coal, fire wood etc.) and contribute to their own leisure activities.
Examples of traditional economies
• Australian aborigines
• The Mbuti in Central Africa
• The Inuit of Northern Canada
Advantages
• There’s little to no hesitation/uncertainty.
• Everyone knows what role they play in the society.
• Life is general, constant, predictable and constant.
Disadvantages
• Innovation is discouraged.
• Lower standards of living.
• Need of development.
b. Market Economy
The forces of demand and supply, without any government interference, determine how resources are allocated; production, consumption, price levels and competition are made by collective actions of individuals or organizations in quest of their own advantage. In the market system the method of coordin...
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...f the mixed economy is a suitable system for our current economic conditions.
South Africa’s economic growth improved enormously with the shift to a democracy and has been reasonably stable throughout the democratic era with growth being at 3.2% a year on average from 1994 to 2012.this has resulted in the transformation of the economy from the GDP of $136 billion in 1994 to $384 billion in the year 2012. This was a report from (The Economic Society of South African) don over a period of 20 years of country’s economy since the democracy began, from page 86 of the 193 paged documents, based on data given by the World Bank’s development indicators released in February 2014.
It is clear that South Africa as an economy has improved over the years under the mixed economic system, judging by the facts produced by the GDP and the development the countries undergone.
... economic system, one that needs no interference, and needs to type of larger organization involvement.
"News." Africa Continues to Grow Strongly but Poverty and Inequality Remain Persistently High. N.p., n.d. Web. 26 Nov. 2013.
“Future of Zimbabwe's Economy Remains Uncertain.” COMTEX News Network. Xinhua News Agency 18 May. 2001. p1008138h5434. Gale. Web. 3 Nov. 2009.
Previously, before market society, production and distribution was accomplished by following a traditional system, involving the tasks being passed down by generations. Heilbroner (1993) explains this ...
Supporting fact two: The economy of the country continued to grow, despite the sudden change of power. South Africans salaries increased: there used to be 12% of workers payed 2$ a day and after the abolishment of the apartheid, it went down to 5%. (http://www.bbc.com/news/business-23041513)
As with all markets and their respective economies, having equilibrium is one of the key factors of a successful system. Although most markets do not reach equilibrium, they attempt at getting close. There are numerous methods devised to reach equilibrium, whether they involve human intervention directly or a cumulative decision by all factors involved. These factors may be a seller's willingness to lower overall revenue, or a buyer's willingness to withhold some demand for a certain product. Of course, the basics of supply and demand retrospectively control the equilibrium in the market.
A market economy is a society that is industrialized. For example, there are factories and workers that make goods. But a society does not need capitalism to be industrialized. A market economy is where there are people who compete. They try to get money by themselves and only for them. They are money greedy and the want it all. This is a goal and this is what a market economy focuses on. But even though society is industrialized, they have limits. They are controlled by the government. For example, Social Security is controlled by the government. When the government controls, institutions do not have many rights. For social security, there are qualifications and these qualifications are made by the government. But the poor face more problems than the rich. For example, the rich have more power and control the ways there
Capitalism is an economic system in which the production and distribution are privately owned, the government involvement is minimal,and there is free enterprise. In Capitalism, the means of production are privately owned and operated for profit in a competitive market. Also the economic investment, ownership and profits are all owned by individuals. Under capitalism the state is separated from the economy, which means that the government has no role in business. In other words, everyone works for themselves. The market forces in a capitalist country runs by supply and demand which it determines the price and later on it turns into profits. Supply is the quantity of goods and services a business is willing to sell, while Demand is the quantity of goods and services consumers are willing to buy. Therefore, Capitalism is the best economic system because it rewards the ones that work hard and since the government does not control trade, there is a large variety of goods and creates options for consumers to fit their personal needs.
The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the amount of goods that buyers are willing and able to purchase at various prices, assuming all other non-price factors remain the same. The demand curve is almost always represented as downwards-sloping, meaning that as price decreases, consumers will buy more of the good. Just as the supply curves reflect marginal cost curves, demand curves can be described as marginal utility curves. The main determinants of individual demand are the price of the good, level of income, personal tastes, the population, government policies, the price of substitute goods, and the price of complementary goods.
...ellent policies, 5) the Constitution had come into existence through the working together of various groups that had composed South Africa, 6) South Africa's political and economic institutions are well established, 7) and that South Africa is by far the most developed country in Africa. However, there are still avenues that can impede further progress, more so economically then politically. Primarily the lack of foreign investment, especially when South Africa's gold and diamond reserves are emptied as other parts of economy are not as developed. Secondly, the economic gap between whites and blacks that was stretched during the time of apartheid needs to be tightened or else it could become dangerous to the stability of the political system. However, due to the leadership of Nelson Mandela, South Africa’s current government structure exists to solve these issues.
The topic that I have selected for my chapter evaluation essay is that of “Economic Development”. This paragraph above is the best summary of the chapter’s contents. In this chapter the author discusses the influence of development on the three worlds of countries. These worlds are benchmarks set to assess countries economic states relative to each other.
Artadi, Elsa V., and Xavier Sala-i-Martin. The Economic Tragedy of the XXth Century: Growth in Africa. Cambridge, MA: National Bureau of Economic Research, 2003. Print.
As mentioned above, South Africa has been working on improving the lives of people. The Reconstruction and Development Program is one of the many that have been implemented that work on improving the life styles of people in South Africa. This is one of the strategies that has been very successful and is still standing as is. It is through this program that the lives of the many South Africans living in rural areas will be made
Economic development is highly dependent on the natural resources for food and energy production, which inputs to manufacturing, and to absorbing wastes and pollutants. Thus, there is a high dependency on farming. However, South Africa is not rich in agriculture resources; ...
The majority of the continent of Africa has not been as economically progressive as the other continents in today’s world. However, over the past few years, it has been rapidly growing. Although there have been multiple countries in Africa that have reflected a strong growing economy, such as South Africa and Botswana, there are many other countries that are still corrupt and are still struggling to grow as a nation. There are many challenges that are facing Africa currently. Some of these major challenges being, corrupt governments, vicious cycles of aid, and poverty traps. However, among these challenges, there still lies to be great opportunities for Africa within their technology and business sectors.