...Patrick Moyes Economics for Global Decision Makers Week 2 Dr. Barbara-Leigh Tonelli February 12, 2013 Introduction: Economic freedom is defined as the basic right of all people to act freely in how they work, what they produce, what they consume, and how they invest their time and money. It is “an essential aspect of human liberty, without which a person’s rights to life, liberty, and the pursuit of happiness may be fundamentally compromised” (Miller, Kim, 2013). Economist/philosopher Friedrich A. Hayek stated that economic freedom is the “prerequisite of any other freedom” (Miller, Kim, 2013). Economic freedom, or lack thereof, is experienced in different levels throughout the world, depending on the degree to which governments restrain them in their countries. The Index of Economic Freedom, created 1995 by The Wall Street Journal and The Heritage Foundation, ranks the economic freedom of every country and reports year to year how the levels have changed. This paper will focus on the relationship between economic freedom and variations in wealth among countries, and will describe specifically how one country from the index has changed over the past 5 – 10 years. The Relationship between Economic Freedom and Variations in Wealth: According to the Index of Economic Freedom, researchers have established that economic freedom is directly associated with economic growth and prosperity (Mitchell, 2013). The wealthiest countries in the world, based on per capita GDP...
Words: 1526 - Pages: 7
...CHAPTER FOUR THE ECONOMIC ENVIRONMENT OBJECTIVES • To appreciate the importance of the economic analysis of foreign markets • To identify the major dimensions of international economic analysis • To compare and contrast the economic indicators of countries • To profile the characteristics of the types of economic systems • To discuss the idea of economic freedom • To profile the idea, drivers, and constraints of economic transition CHAPTER OVERVIEW When companies source, manufacture, and/or market products in foreign countries, they encounter fascinating and often challenging economic environments. Chapter Four first explores the economic environments of countries in which an MNE might want to operate by discussing the importance of economic analysis and identifying the major dimensions of that process. It then compares and contrasts key macroeconomic indicators, such as economic growth, inflation, and the surpluses and deficits reflected in the balance of payments. Finally, it reviews the characteristics of the major types of economic systems, explores the principles of economic freedom, and concludes by examining the idea, the drivers, and the constraints associated with the transition from a centrally-planned to a market-based economy. CHAPTER OUTLINE OPENING CASE: MCDONALD’S AND RUSSIA’S ECONOMIC TRANSITION [See Map 4.1.] This case exemplifies the extraordinary challenges of operating in a transition economy. In fascinating detail...
Words: 4349 - Pages: 18
...The opportunity cost of Tammie's trip to the concert is: A) $300. B) $450. C) $500. D) $600. 2. When a provincial government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of: A) marginal analysis. B) full employment. C) full production. D) opportunity cost. 3. When economists describe "a market," they mean: A) a place where stocks and bonds are traded. B) information networks that allow individuals to keep in touch with each other. C) a hypothetical place where the production of goods and services takes place. D) a mechanism which coordinates actions of consumers and producers to establish equilibrium prices and quantities. 4. The study of economics is primarily concerned with: A) keeping private businesses from losing money. B) demonstrating that capitalistic economies are superior to socialistic economies. C) choices which are made in seeking to use scarce resources efficiently. D) determining the most equitable distribution of society's output. 5. Economics may best be defined as: A) the interaction between macro and micro considerations. B) the study of the behaviour of people and institutions in the production, distribution, and consumption of scarce goods. C) the empirical testing of value judgments through the use of induction and deduction. D) the use of policy to refute facts and hypotheses. Econ 100 Ch 1 & 2 Quiz marks = 35 STUDENT...
Words: 1633 - Pages: 7
...personal endeavors. Some of us have grown up with an expectation of freedom to choose, while others depend on their government to act in their best interest. Depending on what country you call home, you either participant in a free market economy, a controlled economy, or a mixture of both. In this report we are going to look at what creates each type of economy and where we can find examples of each within the world. First we are going to analysis the characteristic of a Free Market Economy. In a free market, the government’s role is to “make sure that the market is stable enough to, properly, conduct business” (Freidman). In purity, the system hopes to “eliminate subsidies for industries, the pre determination of prices, and the amount of regulation controlling certain industry sectors”(Freidman). The implementation of a free market introduced individual property rights, which allows citizens to voluntarily exchange property/resources at a price arranged solely by the mutual consent of the buyer and seller. The seller is free to choose if the price being offered is worth their property; without threat of physical force, fraud, or coercion by a third party. It is for this reason that in a Market Economy, Capitalism prevails. The driving force behind a capitalist market is the entrepreneurs desire to turn a profit. Another major characteristic of a free market is free competition. This basic rule of a fee market states that people are free to compete without interference from...
Words: 2335 - Pages: 10
...JOHNMATE1122@Gmail.Com 1. (TCO 1) Economics is the study of (Points : 1) increasing the level of productive resources so there is maximum output in society. increasing the level of productive resources so there is a minimum level of income. how people, institutions, and society make choices under conditions of scarcity. the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses. Question 2.2. (TCO 1) The key economic concept that serves as the basis for the study of economics is (Points : 1) inflation. unemployment. money. scarcity. Question 3.3. (TCO 1) From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal (Points : 1) costs of attending college has decreased that year. benefits of attending college has increased that year. benefits of attending college are greater than the marginal costs. costs of attending college will be subsidized by someone else such as parents or the government. Question 4.4. (TCO 1) Which is considered to be an economic resource by economists? (Points : 1) Rent Money Labor Wages Question 5.5. (TCO 1) If an economy is producing at a point inside a production possibilities curve, then (Points : 1) the economy is efficient. there is economic growth. resources...
Words: 1059 - Pages: 5
...JOHNMATE1122@Gmail.Com 1. (TCO 1) Economics is the study of (Points : 1) increasing the level of productive resources so there is maximum output in society. increasing the level of productive resources so there is a minimum level of income. how people, institutions, and society make choices under conditions of scarcity. the efficient use of scarce resources paid for at the minimum level of cost to consumers and businesses. Question 2.2. (TCO 1) The key economic concept that serves as the basis for the study of economics is (Points : 1) inflation. unemployment. money. scarcity. Question 3.3. (TCO 1) From an economic perspective, when a student decides to attend another year of college, the student has concluded that the marginal (Points : 1) costs of attending college has decreased that year. benefits of attending college has increased that year. benefits of attending college are greater than the marginal costs. costs of attending college will be subsidized by someone else such as parents or the government. Question 4.4. (TCO 1) Which is considered to be an economic resource by economists? (Points : 1) Rent Money Labor Wages Question 5.5. (TCO 1) If an economy is producing at a point inside a production possibilities curve, then (Points : 1) the economy is efficient. there is economic growth. resources...
Words: 1059 - Pages: 5
...Assignment: The Free-market Theory/The Free Enterprise Theory/Economic Liberalism Key Words: Laissez faire, Adam Smith’s ‘invisible hand’, liberalism, supply and demand, nationalization, privatization, deregulation, rational choice liberalism, neo-liberalism Between 1970 and the last decade before the millennium, there took place a remarkable and dramatic change in the attitude towards the role of the state in economic activities. According to Shutt (1998), during the late 1950 and 60’s, there developed a near consensus among economists especially those linked to the Chicago School of Thought that laissez-faire capitalism was the dominant economic system and that deviation from it was untenable and unsustainable. The argument was that in order to achieve a modicum of development all countries must dedicate themselves to establishing fully liberalized economic, political and cultural systems in which the state plays a minimal role or simply put that of an adjudicator. The rise in what came to be popularly known as the free market economy owed/s much to the failure of the economic models based on extensive state intervention (this was particularly so after the Second World War) to deliver adequate levels of prosperity or security as was signified following the fall of the Soviet Union. As will be argued in this paper using theories from Peter Berger (1985) and Hernando De Soto this apparent logic, especially as far as it was provided as the panacea for rapid economic growth for...
Words: 2759 - Pages: 12
... The test for scarcity is price hence only goods that are not scarce command a price.Therefore economists try to explain how this economic problem is solved by different economic systems. There are three economic systems that exist in the world today that is the free market, command and mixed economy. These economic systems have different ways in which they try to answer the fundamental economic questions of “What? How? And for whom to produce for? Samelson and Nordhaus define a market economy as an elaborate mechanism for cording people, activities and business through the a system of price and markets. Production is mainly driven by the market forces of demand and supply, which determine price hence it is termed as the price mechanism. The USA is an example of what can be simply classified as a market economy. Thus by matching sellers and buyers in each market, the three fundamental questions of what? How?, for whom?. Consumers determine what goods and services will be produced by their dollar votes, which means their daily purchasing decisions. Firms in the market economy are profit motivated therefore they abandon areas where they are losing profits and lured by high profits into production of goods in high demand. The question of “How” goods and services are produced is determined by the competition among different producers. Hence the best way for firms to remain competitive in the market economy, is to keeps costs at minimum by the adopting of the most cost efficient...
Words: 2899 - Pages: 12
...Understanding the Economics Standards for teachers in grades 9–12 Economics studies how people, acting as individuals or in groups, decide to use scarce resources to satisfy wants. This fundamental economic concept of scarcity is at the core of the discipline. There are never enough natural resources, human resources, or capital resources (man-made goods such as tools, equipment, machinery, factories) to produce everything society wants. Therefore, choices must be made on what to produce, how to produce, and for whom to produce. Choices must also be made at a personal level. There never seems to be enough money or time to have or to do everything one wants. Economics is a way of thinking, a science of making choices. Economists examine the decision-making processes of individuals, businesses, markets, governments, and economies as a whole. An understanding of economic principles helps people to: • Consider not only the short-term effects of a decision, but also its long-term effects and possible unintended consequences; • See the connections between personal self-interest and societal goals in order to understand how individual and social choices are made in the context of an economy; • Analyze how social goals, such as freedom, efficiency, and equity, impact public policies. Because of increasing interdependence and globalization, everyone in the United States needs to be aware of the issues in the global economy, their role in that system, and be able...
Words: 7540 - Pages: 31
...Emerging Markets Most of the Developing countries are known as the emerging markets. They are driving the global economy. Investing in emerging markets is a wise decision as the growth can be witnessed and also have better return on investment for future. It is anticipated that Emerging economies will mature two to three times more rapidly than developed nation like the US, as predicted by International Monetary Fund estimates. Corporate profits incline to grow faster when economic growth is higher. Likewise, US companies have done well in the last 12 months is because of their growth in non-US markets. Emerging markets also prove beneficial to investors as they create diversification as they act differently than developed markets. Emerging Markets Index of Morgan Stanley's consists of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey (Forbes). Russia is one of the booming emerging markets in the East. However, Russia is not always an investor favorite as it is a booming market in global oil and gas demand. Russia has tons of both. It is the world's prominent natural gas producer and exporter and has the 8th largest oil reserves in the world. Russia is considered as a bargain for equity, but that is mostly due to country risk. (Forbes) During the recession in 2008, world markets in developed countries crashed but the emerging markets saved the global economy, mainly...
Words: 2614 - Pages: 11
...TABLE OF CONTENT 1.1 Understand the organizational purposes of business ……………………...………... 2 Vision….….………………………………………………………………………..…2 Mission..…….…………………………….....….………………….............................2 Objective……..…………………...…………………………………………………..3 Goal……….……………………..…...……………………………………………….3 2.1 Economic systems attempt to allocate resources effective………………..………......4 Economy market………..……………………………………………………………..4 Command market………….…….………………………………………………….....4 Mixed market……………...………..…………………………………………………4 2.2 The impact of fiscal and monetary policy on business organizations …….....…..…...6 Fiscal policy…....…………..…………………………………………………………6 Monetary policy………………………………………………………………………6 2.3 The impact of competition policy …………………………………………………....8 1.1Understand the organizational purposes of business. A) Vision Vision is the organization aims to grow in the future. It is seen as the key for any company or business want to achieve certain success. Nothing was ever created without a vision. It guides and gives organization direction and purpose, and can serve as a powerful motivate for it. For example: At Nestlé, Nestle believe that research can help them make better food so that people live a better life. Good Food is the primary source of Good Health throughout life. Nestle strive to bring consumers foods that are safe, of high quality and provide optimal nutrition to meet physiological...
Words: 2550 - Pages: 11
...The Great Transformation was the most influential set of events that lead to the emergence of the market society. This had significance affect on the history of economics, which effected society throughout the ages that determined how we live. Economics is a social science that studies how individuals, social organizations and governments make choices on allocating resources to satisfy their material needs. According to Heilbroner, “the economic problem is simply the process of providing for the material well-being of society”(Heilbroner p.159). In essence the problem lies in the illusion of scarcity that motivates production and distribution of material goods. This illusion of scarcity is the driving force in a capitalist cycle of profit through production and distribution. If the illusion of scarcity didn’t exist and goods would become abundant then economics (money) would not be the chief preoccupation. As our wealth increases so does our need to obtain excessive amounts of goods. With the advancement in technology and mobilizing human energy increase production exceeds how fast nature can procreated its yield. Therefore scarcity of nature is not only to be blamed but human nature as well. According to Heilbroner economic problem creates an imbalance in the production and distribution of goods and services. Production is a system that is highly organized with mobilizing effort using human energy for production of goods and services. Mobilizing effort is not enough...
Words: 1236 - Pages: 5
...Institution: Course: Tutor: Date: Free market economies stimulate greater economic growth, whereas state-directed economies stifle growth A free market economy is a type of market economy where forces of supply and demand exist freely without interference from any authority such the government or any price setting monopolies. In this system, prices are controlled by supply and demand forces. The buyers and sellers make decisions that they themselves determine solely (citing in Watkins, 1959). State-directed economy refers to a system where the state controls means of production but the economic activity is mostly directed to some extent by the government or ministry of planning through indicative planning. According to Alec Nove (1987) State directed economy is also commonly known as centrally planned economy. The main government or central government is the body concerned with directing all sectors of the economy. “The free market is the only economic system consistent with personal freedom. It thus not only provides the basis for greatest improvements, it also provides the basis for remaining free off political control over our lives.” (Kates, 2011,p. 4). Ignoring the role of individuals ignores everything important about how a market economy works. Free market economy stimulates economic growth as they rely on individuals to purchase and sell goods and services freely and proactively. Free market stimulates economic growth because most businesses strive to keep...
Words: 1008 - Pages: 5
...CHAPTER I- NATURE, SCOPE AND METHODOLOGY IN ECONOMICS NATURE OF ECONOMICS ECONOMICS- Comes from the Greek oikonomia means management of a household, administration is a social science that deals with efficient allocation of scarce resources to satisfy the unlimited wants and needs. SOCIAL SCIENCE Is the field of scientific knowledge and academic scholarship that explore social groups and, more generally, human society RESOURCES Things use to produce other things to satisfy people wants WANT is something that is desired. It is said that people have unlimited wants, but limited resources NEED Is something that is necessary for survival (such as food and shelter) SCOPE OF ECONOMICS TWO MAJOR BRANCHES OF ECONOMICS MACROECONOMICS Examines either the economy as a whole or its basic subdivisions or aggregates, such as the government, household, and business sectors MICROECONOMICS Looks at specific economics units. At this level of analysis, the economist observes details of an economics unit, or very small segment of the economy ANALYTICAL TOOLS AND M ETHODOLOGY USED IN ECONOMICS rational self-interest means that given a certain condition, individuals try to minimize the expected cost for a benefit or maximize the expected benefit with a cost. Opportunity cost It is cost associated with opportunities that are foregone when...
Words: 3610 - Pages: 15
...in a Socialist nation. Some nations claim to be socialist, but none are. n the Philippines, some mediocre thinking Filipinos are fed up with an illusion that after the Marcos Administrations through a woman whom they call “icon of democracy” in the Philippines – which is late former Philippine president Ms. Corazon Aquino, the Philippines has now become purely democratic country; whereas it is not. Actually, the Philippines still remain republic just like the times of Marcos, but what has happened only or have changed after Marcos administration is the increased of freedom of people to do whatever they wanted to do including the relentless and useless killings of everyone against their fellow Filipinos, most especially the media people, though the media people have gain more freedom to express their ideas and thoughts, murderers and killers have gain also more freedom to kill media people. It is a directly proportional freedom. Democracy means rule of the people. The two most common forms of democracy are direct democracy and representative democracy. In direct democracy everyone takes part in making a decision, as in a town meeting or a referendum. The specific rules may vary: perhaps everyone must agree, perhaps there must be consensus, perhaps a mere majority is required to make a decision. The other, better known form of democracy is a representative democracy. People elect representative to make decisions or laws. Again, specifics vary greatly. And, surprise, a representative...
Words: 2641 - Pages: 11
