Срсп 10 branches of the economy

Economic system.

The functions of an economic system may define as follows:

1. to match supply to the effective demand for goods and services in an efficient manner:

2. to determine what goods and services are to be produced, and in what quantities:

3. to distribute scarce resources among the industries producing goods and services:

4. to distribute the products of industry among members of the community:

5. to provide for maintenance and expansion of fixed capital investment:

6. To fully utilize the resources of society.

Depending on how decisions are made and how the above functions are fulfilled economic systems can be singled out. Many countries like Britain, Sweden, and France operate a mixed system (mixed economy) splitting the economy into public and private sectors.

In Britain, for example, about two-thirds of the economy and about five-sixth of commerce is conducted by private firms. The remainder of the activities of the economy is conducted by socially-owned enterprises. Some, like the Army, Navy, and Air Force, are clearly the sort of institutions that the state itself should control. Others have tended to be performed by the state because they are non-profit making, and as such are unlikely to be attractive to businessmen. Such activities as education and medical care are best operated as socially provided amenities for the benefit of all citizens.

Transport is another natural monopoly. It would be uneconomic to run two railway lines from one place to another, or two different sets of half-empty buses along a country road.

These natural monopolies have, for economic, political, or social reasons, come to be run in the United Kingdom by nationalized institutions, or the municipal authorities, who provide the services required at reasonable prices.

Ex.1. Read and discuss the text. Single out the main facts and present them in a short review.

Ex.2. Give extensive answers to these discussion questions.

1. Name the most important economic resources and explain the problems any economic system has to solve with regard to them.

2. Describe the economic systems existing in the world today. Which of the most effective system from your point of view (mention the economic agents and their relationships)?

3. Do you agree that competition is an important force of the market?

4. What is entrepreneurial activity?

5. What are natural monopolies?

6. What liability is born by different forms of business unit (joint-stock companies, partnerships)?

Ex.3. Give explanations in English.

to pay rent; a loan; interest payments; share capital; factor services; factor payments; factor incomes; factors of production; a neutral equilibrium in the economy