Archive for the ‘Economic System’ Category
The stage of economic development and the level of economic development and the level of economic activity determine the suitability of a form of business firm. In fact, a particular form of business firm play a dominant role in the economic activities at a particular stage of economic development. In other words, all forms of business firms play their due roles in the economic activities. The forms of business firms are mainly divided in to three categories like private sector, public sector and cooperative sector. When it comes to private sector, there are three forms like sole proprietorship, partnership, and joint stock companies. The two forms of public sector are departmental undertakings and statutory corporations. All the co-operative societies are comes under co-operative sector. The total business activity in the country is carried out in three sectors viz., private sector, public sector and co-operative sector.
By economic system is meant the different forms of economic organizations that arise in the community from the organization or mode of product. It is a set up which comprises various institutions and bodies, with the ultimate purpose of satisfying the wants of the people having within a particular territory and in the way in which those people want. The basic features of economic system are that they are not static; they are relative to the needs of the people and hence are of a changing nature. They have fundamental uniformity of problems within a mechanism of great diversity. They are all evolving patterns of human relations.
With the help of institutions, property, money system, labor organization, government agencies, production unit, etc, they try to secure maximum production from scarce human and natural resources. Their goal is to satisfy individuals and public by production of goods and services required by them. economic system arise and are modified, from time to time, by various factors such as the laws of the land, the decisions of the judicial agencies, the contractual arrangements people set up among themselves in order to carry on exchange, the customs, habits, set of beliefs that people develop within the social and political set up of the country, and the public opinion about the wages and means through which people wish to satisfy their wants.