Economics Essay Example | Topics and Well Written Essays - 500 words - 14

Economics - Essay ExampleThe first situation is the traditional capitalist approach where the judicature adopts a totally hands off policy allowing the resources to be used by mysticly have try, reducing protection to local industry and horticulture by lowering import tariffs and allowing free competition. The second approach (communist) is heavy governmental involvement in the economy where all resources are publicly owned and the government decides their allocation and use. However, it is usual to find a middle path adopted by most countries including the US.Governments burn downnot distinguish companies that will perform well and their reasons for ledger entry a particular area of the economy frequently targets serving of social causes and political ends rather that those of economics. Examples are, the distribution of wealth, regulation of competition, supplying infrastructure etc. This leads to a diversion of resources to non-productive enterprises and away from private h ands that could have utilized the resources more efficiently and effectively stops investment/ competition from abroad. Freeing of trade can result in competition for goods and services leading to efficient utilization of resources, improved standards of living, and economic growth. Despite this, it is necessary for governments to address certain areas that private enterprise would otherwise neglect or the benefits of economic growth would not percolate down to the economically backward sections of society. For example, the defense of the country is not an issue that private enterprise can attend another example is the provision of health care, if completely privatized good health-care would become out of reach for large sections of the economically weak. each the neo-classical rationale of market failure in the provision of public goods and need to lessen the effect of externalities etc. or the evolutionary