Economics
Question 1. What are the vital functions of an Economy? Explain the price mechanism.
Answer:- An economy refers to the financial system of the region, province or nation. "It is a system by which folks get a livelihood." For instance the "Economy includes farms, factories, mines, shops, banks, roads, railways, aircrafts, offices, schools, cinemas etc., which grants the people with the goods and services which they also use themselves or sell overseas in order to be able to buy imports." Sir John Hicks "An economy consists of nothing else but an enormous cooperation of workers or manufacturer to make things and do things which clients want."
The Vital Functions of an Economy:-
Production, consumption and growth are vital factors of economics. Economies might differ in the organization but all perform these three functions which are discussed below.
1. Productions:-
The First vital process of an economy is manufacture which must go on incessantly. "Production comprises any action, and the stipulation of any service, which satisfies and is likely to satisfy a want." In this wider sense, production includes products produced on farms like rice, wheat, fruits and vegetables and those manufactured in the factories like clothes, electronic goods, electrical items etc. It also includes the services of shopkeepers, traders, transporters, actors, doctors, civil servants, teachers, engineers and akin to who help in fulfilling the needs of the people in the economy through their services. But production eliminates certain goods and services though they satisfy human needs. It includes, domestic work done within the family by the housewives, husband and children, production of hobby articles like paintings, production of vegetables in the kitchen garden. The last is voluntary work. John Hicks defines "Production is any activity directed to satisfaction of other people's wants through exchange." Thus production means exchange of goods for consideration of money. Three
Answer:- An economy refers to the financial system of the region, province or nation. "It is a system by which folks get a livelihood." For instance the "Economy includes farms, factories, mines, shops, banks, roads, railways, aircrafts, offices, schools, cinemas etc., which grants the people with the goods and services which they also use themselves or sell overseas in order to be able to buy imports." Sir John Hicks "An economy consists of nothing else but an enormous cooperation of workers or manufacturer to make things and do things which clients want."
The Vital Functions of an Economy:-
Production, consumption and growth are vital factors of economics. Economies might differ in the organization but all perform these three functions which are discussed below.
1. Productions:-
The First vital process of an economy is manufacture which must go on incessantly. "Production comprises any action, and the stipulation of any service, which satisfies and is likely to satisfy a want." In this wider sense, production includes products produced on farms like rice, wheat, fruits and vegetables and those manufactured in the factories like clothes, electronic goods, electrical items etc. It also includes the services of shopkeepers, traders, transporters, actors, doctors, civil servants, teachers, engineers and akin to who help in fulfilling the needs of the people in the economy through their services. But production eliminates certain goods and services though they satisfy human needs. It includes, domestic work done within the family by the housewives, husband and children, production of hobby articles like paintings, production of vegetables in the kitchen garden. The last is voluntary work. John Hicks defines "Production is any activity directed to satisfaction of other people's wants through exchange." Thus production means exchange of goods for consideration of money. Three