Mix of the UK Economy
The UK economy combines factors of both a free market economy and one
which is fully planned. This brings both advantages and disadvantages
as it limits the power of market forces, but on the other hand
restricts the influence the government has over supply and demand.
Since the 1980s the government in the UK has steadily reduced its
involvement in the economic system. This has been done through
privatisation, which means handing over control of services to private
companies and investors, for example British Gas or Railtrack.
A free market economy revolves around the central concept of supply
and demand. Consumers make individual decisions about purchases for
their own self-interest whilst producers aim to make the largest
profits by supplying exactly what the consumers desire. Resources are
not allocated by the government or any state organisation but via the
price mechanism. This means that the producers determine the supply
and the consumers determine the demand, the combination of these two
factors determines the price of a product.
A key feature of a market economy is the freedom of choice and
enterprise. This means that producers are free to obtain economic
resources for use in production and are then able to sell their
product in whichever way they choose. These people are known as
entrepreneurs and are only seen in a market economy. Another major
difference between free market and planned economies is the principle
of self-interest. The idea of capitalism is that individuals are free
to act as they wish and this translates into the concept of an entire
economy being built around the idea of self-...
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... economy than a planned one, but the mix between the two is still
fairly equal. Many privatisations have been a success, such as British
Telecom, British Gas, and have provided the same service as a
nationalised company whilst remaining competitive. However, others
such as the privatisation of the UK's rail network have no been so
successful and many people yearn for a return to state control.
Personally, I feel that the mix between market and planned economies
in the UK is about right, although there are some services such as the
aforementioned rail network which I believe may be better run in the
hands of the government. On the other hand, if privatisation reduces
taxes and enable the government to concentrate on more essential
services such as health and education, then privatisation may be the
way forward.
In answering the above question, I shall address myself first to examining manufacturing exports and the British position, followed by a word on the Imperial Preference which hindered British trade flows with the rest of the world. I shall go on to talk more generally about whether there has been a decline in the aggregate economy (essentially exploring the pessimistic implied in the title). Further, I shall argue that the British economy has performed well against some serious cultural and structural constraints and should not be subjected to unduly negative analysis.
...rall due to the level of consensus there is relatively little difference between the way the economy has panned out between the conservatives period in charge end the dominance that the Labour party currently are enjoying. On the whole the economy has become relatively depoliticised since the Thatcher years as politicians have less control over this increasingly globalised and privatised aspect of the agenda. Now with Brown’s decision to give the Bank of England the power to set the level of interest rates the economy has become less prone to state intervention then ever especially with a clear end to the grip that Trade Unions once had over the Labour party. Overall state intervention over this period has decreased and barring a crisis it is likely that this will remain the case unless the Liberal Democrats manage to gain power, even through a coalition government.
Was the British entrepreneur the most important single reason for the relative decline of the British economy in the late nineteenth century?
The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an increase in the rate of inflation. Paying off the national debt would actually help lower interest rates and boost investments, and therefore further increase the wealth of the population, while keeping inflation at bay.
The government should regulate monopolies in the different monopolies like the prevent excess prices Without government regulation, monopolies could put prices above the competitive equilibrium. This would lead to allocative inefficiency and a decline in consumer welfare. According to Tejvan Pettinger, the professor of Economics at Oxford University UK and a online blogger. “If a firm has a monopoly over the provision of a particular service, it may have little incentive to offer a good quality
Marshall’s explanation of how producers decide is divided in two decision making functions: 1) the price bidding function and 2) the production level start up function. Producers do not impose prices; they propose list prices and buyers decide how much to buy at prices proposed, of course after some possible bargaining. All the same producers do not impose production levels, they invest with a production level target that sometime later may succeed or not. Both price and production follow demand in the same direction; if demand grows then producers observe that their individual inventories decrease and hence they, acting in cooperation or huge competition among them, raise their own prices and production levels. Next, each producer decide whether to accept the amount sold and keep the selling prices or to change bid prices and production levels again until a satisfactory, or inevitable, solution comes about. This satisfactory solution looks ...
The centralisation of capital refers to organisation that hold enough capital to produce on a large scale. Production on a larger scale offers a clear advantage over smaller organisations. Therefore small providers end up out of business or being absorbed by larger organisations. The limited availability of suppliers created a monopoly market. The biggest disadvantage of a monopoly market is pricing.(Begg,2006) An example of centralisation would be the six large energy companies in Britain. Unlike the majority of European Union Countries, in Britain energy companies are private. (James et al, 2013). The companies are free to charge as much as they want. The already high prices further increased by 8.6% in October this year. The excuse of the companies is that the government might intervene with legislation; making it hard for them to increase prices. (ibid)
Individuals and privately owned companies possess the majority of the means of manufacture. The resources used to produce goods and services are privately owned. The resources that are produced are also privately owned by the individual or company. In this type of system, workers have choice about what sorts of work they will do and the opportunity to change jobs. Individual initiative allows individuals have the liberty to start and operate their own businesses. In a free enterprise system, citizens control the production and distribution of goods and service. Citizens are also allowed to gain from their own investments or undertaking. Since individuals control the production of goods and services, multiple individuals and companies will offer the same goods and services. In order to receive more profit and to blow the competition out of the water, companies need to maintain higher quality at a lower price.
It is the role of every government to safeguard its people in all matters including controlling the economy. Every economy faces different challenges including the business cycles that may emanate from the global market. In this paper we try to examine measures taken by the UK’s coalition government in trying to ensure that the economy benefits every citizen and reduces the overall burden to it. We consider the recent comprehensive review on spending.
Running The British Economy Introduction = == == == ==
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
The economy of a nation is a major indication of its success. One aspect of a nation's economic success or failure is the system of government. Whether a nation is socialistic, communistic, ruled by absolute sovereignty, or based on capitalistic principles can be a key factor in a country's economic success or failure. Government is the foundation of an economy but it is not what determines its success. Issues that determine a nation’s economic success include growth strategies, improved or increased resources, investment and savings, government policies, trade, foreign direct investment, income distribution, labor allocation, innovations in technology, and several other economic issues. I feel that economic growth is the main indicator of economic success. Additionally, innovations in technology, improving human capital, and improving foreign direct investment (FDI) are three issues that can lead to economic growth.
The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the amount of goods that buyers are willing and able to purchase at various prices, assuming all other non-price factors remain the same. The demand curve is almost always represented as downwards-sloping, meaning that as price decreases, consumers will buy more of the good. Just as the supply curves reflect marginal cost curves, demand curves can be described as marginal utility curves. The main determinants of individual demand are the price of the good, level of income, personal tastes, the population, government policies, the price of substitute goods, and the price of complementary goods.
The 4 market structures in relation to the benefits and costs to the consumer and producer
The macroeconomic environment is a dynamic environment, which could not remain unchanged (Gajewsky 2015). There are many factors influence the global macroeconomic environment, such as interest rate, exchange rate, GDP,aggregate demand, monetary policy and other macroeconomic variable (Oxelheim and Wihlborg 2008). These factors are closely associated with commodity price.