Explain How Economic Systems Attempt to Allocate and Make Effective Use of Resources.

1154 Words Mar 14th, 2012 5 Pages
2.a Explain how economic systems attempt to allocate and make effective use of resources.
We have 3 types of economy system: - Market economy - Command economy - Mixed economy * Market economy: based on private companies, a lot of decisions based on market mechanism. In nature, market economy is decentralized, flexible, practice and can be change. Supply, demand and solvency influence on deciding ( còn thiếu) * Command economy: * Mixed economy: have factors of both.
To 1985, Vietnam is mixed economy system. The government controlled everything on market: what, how, whom to do? Finally the economy is slow and not develops because of lacking competition. Recognize need to change,
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* Unemployment: staffs of BaoViet buy insurance in the long term. When they are fired, they will receive money and be support to find new job, health insurance in unemployed time. * Industrial policy: Nations want to develop and grow, it needs economy policies are suitable in each period. Industrial policy is leading important because industry contribute many in GDP and is motivation to develop service and agriculture. From 1960s, Vietnam determined industrialization is an important mission. In 1975-1986, unify industry policy based on public property and focus on management system of government was not effect as expectation. In 1986, Vietnam Communist Party innovated economy, industrial policies were planned follow 2 basic ways: identify and choose priority industries, build encouraged and support to develop policies. Realize this is right so it still apply at now. Government think of need to “develop quickly some industry have advantages, can compete in the export market, take shape some key industry, upgrade material facilities, build industrial areas, develop strong industry in rural and suburban”. The industries were selected included: stockinet, aquatic product process, mechanical, electronics and information technology, chemical and petrochemical. In addition, based on nature condition, social and economic of each area, Vietnam’s government

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