Explain How Economic Systems Attempt to Allocate and Make Effective Use of Resources.

1132 Words Feb 21st, 2012 5 Pages
2.a Explain how economic systems attempt to allocate and make effective use of resources.
We have 3 types of economy system: - Market economy - Command economy - Mixed economy * Market economy: based on private companies, a lot of decisions based on market mechanism. In nature, market economy is decentralized, flexible, practice and can be change. Supply, demand and solvency influence on deciding ( còn thiếu) * Command economy: * Mixed economy: have factors of both.
To 1985, Vietnam is mixed economy system. The government controlled everything on market: what, how, whom to do? Finally the economy is slow and not develops because of lacking competition. Recognize need to change,
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The policies always close-knit with business of an organization. 2 core business area of BaoViet is financial and insurance. So they will consider social welfare and industrial policies can influence business of BaoViet. * Social welfare policy:
“Social welfare is total wellbeing of the entire society. Social welfare is not measurable because it involves both objective and value judgments. It is not the same as standard of living but is more like quality of life that includes factors such as the quality of the environment (air, soil, water), level of crime, extent of drug abuse, availability of essential social services, as well as religious and spiritual aspects of life “ (http://www.businessdictionary.com). Part of national income is used to satisfy demands of physical and spiritual of members in social, mainly this money source is distributed include: expense for health, convalescence, nursery school, retirement bonus, social insurance, etc. social welfare money is from 3 basis groups: government’s fund, welfare’s fund of companies, welfare’s fund of corporation.
Government intervenes by re-distribution income with purpose using tax policies for income after tax is fairer.
About BaoViet, social welfare policies of corporation are below: * Old age programs: this is policy for people who are retired. They were employees worked for BaoViet in the long term and contributed to the success of corporation. BaoViet supply retired salaries for them
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