Экономические системы. - 11 стр.

III Answer the questions

1. What’s a planned economy? What are its main features?
2. Give the advantages of a planned economy.
3. Give the disadvantages of a planned economy.
4. What causes delays and queues for some products?

                                   Unit 3
                             Economic Systems

     Market economics
     The best examples of this type of economy are to be found in small South-
East Asian states like Hong Kong and Singapore, though even they are not pure
examples of market economies. Even they contain some businesses owned and
run by the state.
     In a true market economy the government plays no role in the management
of the economy, the government does not intervene in it. The system is based
on private enterprise with private ownership of the means of production and
private supplies of capital, which can be defined as surplus income available
for investment in new business activities. Workers are paid wages by
employers according to how skilled they are and how many firms wish to
employ them. They spend their wages on the products and services they need.
Consumers are willing to spend more on products and services, which are
favoured. Firms producing these goods will make more profits and this will
persuade more firms to produce these particular goods rather than less favoured
ones.
     Thus, we can see that in a market economy it is consumers who decide
what is to be produced. Consumers will be willing to pay high prices for
products they particularly desire. Firms, which are privately owned, see the
opportunity of increased profits and produce the new fashionable and favoured
products.
     Such a system is, at first view, very attractive. The economy adjusts
automatically to meet changing demands. No planners have to be employed,
which allows more resources to be available for production. Firms tend to be