Explain How Economic Systems Attempt to Allocate and Make Effective Use of Resources.

Topics: Economic system, Unemployment, Economics Pages: 4 (1142 words) Published: March 2, 2012
2.a Explain how economic systems attempt to allocate and make effective use of resources. We have 3 types of economy system: - Market economy
- Command economy
- Mixed economy
* Market economy: based on private companies, a lot of decisions based on market mechanism. In nature, market economy is decentralized, flexible, practice and can be change. Supply, demand and solvency influence on deciding ( còn thiếu) * Command economy:

* Mixed economy: have factors of both.
To 1985, Vietnam is mixed economy system. The government controlled everything on market: what, how, whom to do? Finally the economy is slow and not develops because of lacking competition. Recognize need to change, Vietnam Communist Party decided to practice innovation from command to market economy. Government deployed what is called “market economy “. In fact it is mixed economy. Collective mechanism has weaknesses and need interfering of government to deny the breaking of economy. Role of government is promote economy sources to branches to deny lacking or superfluous in production. The economy sources is limited so government need to consider opportunity cost to use effetely. * Land and resources: Vietnam has profuse resources but it is becoming exhausted because of controlling policy is not close and logical. However BaoViet is a service corporate so don’t need resources but it need land to construct offices. * Labor: population of Vietnam is about 86 million. Labor force is 67%. It is huge but few of labor have high level. Intelligentsia is not used effetely so they are unemployed or working jobs they haven’t learnt. BaoViet open training classes to raise level of staff to conformity with professional require. * Capital: be invested by government’s capital, BaoViet have right increase it by issue share 2.b Discuss the impact of social welfare and industrial policy initiatives on organizations and the wider community. Control...
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