Economics Is A Set Of Institutional Arrangements Essay

896 Words Oct 12th, 2015 4 Pages
In today’s sociality everything we purchase and sell revolves around economics. Economics is a set of institutional arrangements that coordinate in making goods and services (McConnell, Brue, & Flynn, 2013, p. 32). Economics is comprised of two systems, the market system and the command system. These are two systems that are used throughout the world and are mixed together.
Market System
The first system is the market system that focuses more on capitalism, which is the term used to describe the economic system used in the United States. The market system allows businesses, firms, and entrepreneurs to use and discard the resources they own in ways that they see fit. Also the market system utilizes markets and prices to steer the economy in a positive way. The use of markets allow producers and consumers to buy, sale, and trade their goods and services, this promotes individuals to create more goods and services. The market system allows people to open businesses in their own self- interest; this makes every firm and business meet economic goal through decisions regarding work, consumption, or production. (McConnell, Brue, & Flynn, 2013, p. 32). As stated earlier the market system is what the U.S. practices, this system follows the laissez-faire capitalism which limits the government’s role in the economy which protects private property. By practicing this system the U.S self-promoted growth and stability, and allows the production of good, services, and resources that…

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