Economy Class 1:
Economics:
It is the study of management of resources. It involves a detailed study at micro level.
Economy:
It is the study of production,distribution and consumption of goods,services, wealth,tax etc within a country and between different countries and its effect on world resources ,people and associated factors. It involves a macro level study.
The word economy is derived from a Greek word ' Okonomia' ,which means ' House management ' .
Three broad classifications of resources:
1) Natural resource
2) Human Resource ( skill)
3) Capital resource ( machinery, equipment, etc)
Three major processes in economy:
1) Production of resources
2) Distribution of resources
3) Consumption of Resources
Three types of Economies:
1) Capitalist
2) Communist
3) Mixed
Capitalism:
This concept was introduced by Adam Smith, an American economist through his book ' An enquiry into the nature and cause of the wealth of nations', where he emphasizes Laisse Faire government ( ie. Government 's non-intervention into the market)
Features of Capitalism:
1) Profit motive of private players
2) Private players will carry out production, distribution and consumption.
3) High efficiency due to maximum liberty .
4) Less intervention by state.
5)Here consumer is given more choices, so he's the king.
Examples of Capitalist Economies: USA, UK, Japan.
Conten credits: Leo Vishnu Varthan
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