CBS examination - Essay Example

Download file to see previous pages For instance, governments use trade associations in ensuring the production is meeting the demand. Therefore, the trade associations have to generate ways of stabilising production to reflect the demand levels. Similarly, governments could use cooperatives in increasing production of goods and services. These cooperatives could be private organisations that specialise in different types of production or service lines. In addition to this, a government can use multi-level production methods that increase production. A perfect example of the different business models that are used is the induction of People’s Bank of China (Luo, Xue and Han, 2010:71). This was an institution that was used to boost the outward foreign direct investment in the country. In ensuring the participation of PBC was successful, the government had to use monetary and the foreign exchange policy. As such, it motivated the Chinese firms which increased their production and extended the OFDI abroad. Therefore, it is openly displayed that some activities are deemed to increase the production of goods and services, which could also be exported to earn foreign exchange and boost local currency’s strength globally. According to historical developments, countries have used capitalism as a way of improving on their production capacities. Countries that have a strong muscle seem to increase their production by investing in a variety of businesses (McDonald, Burton and Dowling, 2002:13). As such, countries with massive investments end up benefitting more thereby increasing their economic growth. Historically, countries that relied on capitalism are more developed than those that were allied to socialism. In capitalism, different levels of production accrued different levels of profit, which made a difference in the whole economy. However, in socialism, all production levels that recorded gains were directed to the whole economy. Therefore, there was a difference in the production levels in countries that supported socialism from those that supported capitalism. In this line, capitalism has complex methods that ensure all the factors of production are fully utilised. In recent times, countries have been trying to structure better ways of production and service provision. These structures are aimed to ensure the economy is growing at increasingly fast rate. However, it all depends on the roadmaps that are used in structuring the process. As such, many countries are directed towards economic liberalisation, increasing free trade and opening new markets for their products. Similarly, some countries are enhancing the private sector production, decreasing regulations in doing business and privatising some of the public corporations (Luo, Xue and Han, 2010:73). With such strategies, the economy gains by producing more as the different parts of the economy work towards a common goal. In making this a success, many of the regulations put in place are directed towards strengthening the private sector. They deregulate the concentration of other production phases and ensure the private sector is booming and producing more. For instance, China banked on privatisation of many industries that produced more as compared to the current state; this culminated to a remarkable economic growth. Capitalism and neo-liberalism have their differences and convergent points which are dependent on the way the ...Download file to see next pagesRead More