Introduction to Economic Essay Example | Topics and Well Written Essays - 1500 words

Introduction to Economic - Essay ExampleAll economies in the substantial population depend on a mixture of both governments and markets to allocation resources efficiently. According to markets, resources ar allocated through willing choices that are made by all participants in the economy and individuals. On the other hand, governments allocate resources involuntarily and enforce laws, taxation systems, regulations, and restrictions to participants. Question 1 Market and Government Economies Countries may have preferences between the utilise of governments or markets in allocating resources within their economies however, it is distinct that both markets and governments play an important role in intricate economies. Markets generally involve exchange of goods and services in a manner that is free, since no force utilize to compel any scotch participant in buying or selling items of economic value. A market basically thrives on participants willingness and desire to exchang e. Pure market economies exclusively use markets to allocate and run out resources throughout the economy. Government economies rely on involuntary enforcement to allocate resources through setting of rules and laws to govern a resource allocation system. The rules and laws are mandatory for participants in the economy, and the government has the right to enforce the laws and punish participants who move over to agree with the generally accepted rules and regulations. Participants in the economy follow resource allocation rules and regulations because the government and germane(predicate) authorities enforce them. Pure command economies use governments exclusively to allocate resources in their economies. However, such kind of economies precludes theoretical extremes, since they do not actually exist and are not real numberistic with regards to the real creative activity situation. Both fresh market and pure command economies provide a benchmark to facilitate real world econ omic aspects comparison. Mixed economies are therefore evident in the real world, since both pure market and pure command economies preclude non-existent theoretical ideals, leaving the real world economies somewhere in between the two theoretical ideals. Although the theoretical ideals are non-existent in the real world, their collective contributions are evident in mixed kind of economies. It is important to note that, although mixed economies use both markets and governments to allocate resources, real world mixed economies use more of governments or markets, in accordance to the systems they use. This alludes to economies such as capitalism, which is an economic system that is market oriented, as it uses more of market than government in allocating resources. Similarly, communism and socialism are mixed economies that use more of governments than markets to allocate resources (Greene, 2007, p.46). Mixed economies use government policies, rules, and regulations as an inherent pl ace used to pursue economic goals in allocation of resources. Economic goals pursued encompass societal desires such as the need to achieve full employment, equity, stability of the economy, economic efficiency, and sustainable growth. Through economic policies, governments walk out the primary responsibility of pursuing economic goals desired by the economy through assisting, controlling, guiding, and regulating the voluntary market. Government policies are undertaken in form of