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In USA, almost two thirds of the total production is consumed by the individuals for personal use whereas only one third is consumed by the governments. The free enterprise believes that the private ownership is the best form of the economy because it is able to operate more competently than its counterpart. They believe that when the economic forces are free to act, the supply and the demand of the product intersect to arrive at a competent price. At the same time, this intersection of demand and supply predicts the quantity of production. When the consumers demand more of a product then the economy is producing, the price of the respective good increases. This chance for profitability calls in for more organizations to produce the similar good. At the same time, when the supply of the good in the economy is more than the demand, the price falls as a result. Most of the organizations exit due to the decreasing profitability. Therefore, the market economy operates efficiently following the market forces and reflecting on the wishes of the people (Samuelson, 1998). But there is too much freedom with no regulations that causes the problems and does not make it s viable form of economy for the allocation of resources.
On the other hand, the socialist economy is more portrayed by the high state ownership and central planning. The economists believe that this form of the economy is less efficient because it does not reflect on the market forces or the price changes. In this form of economy, the means of the production are owned by the state and the workers. It focuses on ones capacity to produce and wants. Basically, it aspires to provide for more equitability in the economy (Samuelson, 1998). With no economic benefit to the individuals, the people are less efficient and unstable. It also breeds incompetence in the economy that will cause it lose in the long. At the same time, the state benefits call for unannounced immigrants and cause stagnation in the economy.
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People celebrate Christmas considering it a Holy day because of the birth of Jesus. They express their love for Jesus, greet each other, invite people at gatherings and dinners, and exchange gifts. That lovely Christmas tree and Santa Claus with his lovely gifts are much awaited throughout the year.
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These occurrences over the last decade have caused Americans to pay more attention to what is happening in current economics. This interest is encouraging people to understand how the United States economy actually works, what contributes to it, and what that means, or rather translates to, in the practical day-to-day workings of the present day economy.
This approach has attracted various criticisms over time which had spurred wide debate among academicians. The recent global financial markets turmoil bears testimony to the fact that economic agents do not always behave in a way, which is predicted by the mathematical model of probability.
But after 1970 the picture was changed a lot and the market has faced a rapid change in macro factors. Those are like free trade and markets and more than this the government intervention was also reduced a lot. So after 1970 the market was quite liberalized.
The article claims that the present Governor of the Bank of England, Mark Carney, has recently stated that the bank had overvalued the interest rate policy in the nation (BBC, 2014). Through the Forward Guidance Policy, central bank in a nation tries to match its forecast
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