Trigger four
Problem
Political impact on a countrys economy
Learning objectives
Different types of economies
What is foreign direct investment?
Challenges of political bureaucracy and regualtions
Keywords
Bureaucracy
Mixed economy
Market economy
Reforms
Monetary and fiscal politics
Business and political climate
Foreign investments
Different types of economies
Traditional
"A traditional economic system is one in which each new generation retains the economic position of its parents and grandparents. Traditional economies rely on the historic success of social customs."
Market
"Market economies are based on consumers and their buying decisions rather than under government control. Market trends and product popularity generate what businesses produce.
The buyers decide who gets which products by what they are willing to pay for what they want. Complete market economies do not utilize price controls or subsidies and prefer less regulation of industry and production. Market decisions rely on supply and demand for pricing. Government’s role is to create a stable economy for the market to operate properly.
Producers use the information to set accurate prices and procure supplies at the lowest cost. Price relates directly to the costs and benefits of product creation and use and required profit."
The four types of economie
Command
"In a command economy, the government controls all economic activity. One example of a command economy is communism. In a government-directed economy, the market plays little to no role in production decisions."Economic system types
In a command economy, it is theoretically possible for the government to create enough jobs and provide goods and services at an affordable rate. However, in reality most command economies tend to focus on the most valuable resources like oil.
The four types of economie
Mixed
"Combines qualities of market and command systems into one. In many countries where neither the government nor the business entities can maintain the economy alone, both sectors are integral to economic success.
Theoretically, this system should be able to combine the best policies of both systems, but in practice the proportion government controls and response to market forces varies. Some countries rely more on market emphasis and others on state planning."Economic system types
What is foreign direct investment?
"Is when an individual or business owns 10 percent or more of a foreign company's capital. All later financial transactions are extra direct investments, according to the International Monetary Fund.
is critical for developing and emerging market countries. Their companies need the sophisticated investors' funding and expertise to expand their international sales.
Foreign direct investment benefits the global economy, as well as investors and recipients. Capital goes to the businesses with the best growth prospects, anywhere in the world.
That gives well-run businesses, regardless of race, color or creed, a competitive advantage. It reduces the effects of politics, cronyism and bribery. As a result, the smartest money rewards the best businesses all over the world. Their goods and services go to market faster than without unrestricted FDI.
Individual investors receive the extra benefits of lowered risk.
Recipient businesses receive "best practices" management, accounting or legal guidance from their investors.
FDI rewards the best companies in any country. It reduces the influence of local governments over them."
Foreign Direct Investment: Pros, Cons and Importance
Challenges of political bureaucracy and regualtions
Sources
Economic system types
The four types of economie
Foreign Direct Investment: Pros, Cons and Importance
Bureaucracy and Politicians: Dynamics and Challenges
Top 5 Problems in Bureaucracy
Political impact on a countrys economy
Learning objectives
Different types of economies
What is foreign direct investment?
Challenges of political bureaucracy and regualtions
Keywords
Bureaucracy
Mixed economy
Market economy
Reforms
Monetary and fiscal politics
Business and political climate
Foreign investments
Traditional
"A traditional economic system is one in which each new generation retains the economic position of its parents and grandparents. Traditional economies rely on the historic success of social customs."
Market
"Market economies are based on consumers and their buying decisions rather than under government control. Market trends and product popularity generate what businesses produce.
The buyers decide who gets which products by what they are willing to pay for what they want. Complete market economies do not utilize price controls or subsidies and prefer less regulation of industry and production. Market decisions rely on supply and demand for pricing. Government’s role is to create a stable economy for the market to operate properly.
Producers use the information to set accurate prices and procure supplies at the lowest cost. Price relates directly to the costs and benefits of product creation and use and required profit."
The four types of economie
Command
"In a command economy, the government controls all economic activity. One example of a command economy is communism. In a government-directed economy, the market plays little to no role in production decisions."Economic system types
In a command economy, it is theoretically possible for the government to create enough jobs and provide goods and services at an affordable rate. However, in reality most command economies tend to focus on the most valuable resources like oil.
The four types of economie
Mixed
"Combines qualities of market and command systems into one. In many countries where neither the government nor the business entities can maintain the economy alone, both sectors are integral to economic success.
Theoretically, this system should be able to combine the best policies of both systems, but in practice the proportion government controls and response to market forces varies. Some countries rely more on market emphasis and others on state planning."Economic system types
What is foreign direct investment?
"Is when an individual or business owns 10 percent or more of a foreign company's capital. All later financial transactions are extra direct investments, according to the International Monetary Fund.
is critical for developing and emerging market countries. Their companies need the sophisticated investors' funding and expertise to expand their international sales.
Foreign direct investment benefits the global economy, as well as investors and recipients. Capital goes to the businesses with the best growth prospects, anywhere in the world.
That gives well-run businesses, regardless of race, color or creed, a competitive advantage. It reduces the effects of politics, cronyism and bribery. As a result, the smartest money rewards the best businesses all over the world. Their goods and services go to market faster than without unrestricted FDI.
Individual investors receive the extra benefits of lowered risk.
Recipient businesses receive "best practices" management, accounting or legal guidance from their investors.
FDI rewards the best companies in any country. It reduces the influence of local governments over them."
Foreign Direct Investment: Pros, Cons and Importance
Challenges of political bureaucracy and regualtions
"Bureaucracy
and politicians is a concept that refers to the theoretical relationship
between bureaucrats and politicians in the affairs of the state.
The impact of
politicization on the bureaucracy. It refers to a situation where the political
masters play the most influential role in the decisions relating to the
appointment, transfer, promotion, and other career decisiions of civil
servants."
Challenges with
bureaucracy
"Rigidity
Stampedes Creativity: The whole bureaucratic system is formed around rigid
rules and regulations. This excessive form of rigid structures stampedes
creativity and restricts growth.
Impersonal: it
all works within a structure that does not have enough room for human emotions,
satisfaction, needs and values.
Slower Decision
Making:Bureaucracy most often fails to quickly respond to the ever-changing
competitive world. It cannot react to business changes, consumer complaints and
demand-and-supply needs as quickly as some of the other competitors can do.
Limits
Capabilities of Employees:
You must know
that a bureaucratic system believes in heavy departmentalization and division
of job responsibilities. Although compartmentalization may bring some
advantages, but on the other hand, it significantly limits the potential and
capabilities of the employees."
Sources
Economic system types
The four types of economie
Foreign Direct Investment: Pros, Cons and Importance
Bureaucracy and Politicians: Dynamics and Challenges
Top 5 Problems in Bureaucracy
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