The three sectors of the economy

The Three Sectors of the Economy

Factors of production comprise four categories: land, labor, capital, and entrepreneurship.

Land - includes everything contained in the earth or found in the seas.

Labo r - refers to all the people who work. Labor includes full- and part-time workers, managers, and professional people in both the private and public sectors.

Capital - includes money to start and oper­ate a business. It also includes the goods used in the production process. Factories, office buildings, computers, and tools are all consid­ered capital resources. Raw materials that have been processed into a more useful form (such as lumber or steel) are also considered capital. Capital includes infrastructure, which is the physical development of a coun­try. This includes its roads, ports, sanitation facilities, and utilities, especially telecommu­nications. These things are necessary for the production and distribution of goods and services in an economy.

Entrepreneurship - refers to the skills of people who are willing to invest their time and money to run a business. Entrepreneurs orga­nize factors of production to create the goods and services that are part of an economy. They are the employers of a population.

Information – exchange of knowledge, intangible.

Economics is a social science studying economy. Economics tries to find laws or principles by building models. Economics as a science consists of two disciplines that is of microeconomics and macroeconomics. Microeconomics is the branch of economics that studies individual producers, consumers, or markets. Microeconomics also studies how government activities such as regulations and taxes affect individual markets. Besides microeconomics tries to under­stand what factors affect the prices, wages and earnings. Macroeconomics is the branch of economics that studies the economy as a whole. It tries to understand the picture as a whole rather than small parts of it. In particular, it studies the overall values of output, of unemployment and of inflation.

The economy is the realized social system of production, exchange, distribution and consumption of goods and services of a country or other area. An economy can mean the economy of a city (local economy), a country (national economy) or the world as a whole (international economy), provided that it is involved in the production of goods and services.

Economic infrastructure is:

1) the basic physical and organizational structures and facilities (e.g., buildings, roads, and power supplies) needed for the operation of a society or enterprise.

2) the stock of fixed capital equipment in a country, including factories, roads, schools, etc., considered as a determinant of economic growth.

The economy may also be classified into subdivisions called sectors.

Based on ownership, the economy may be subdivided into:

• Public sector

• Private sector

• Voluntary sector

The public sector is the part of economic and administrative life that deals with the delivery of goods and services by and for the government, whether national, regional or local/municipal . Examples of public sector activity range from delivering social security, administering urban planning and organising national defenses . The organization of the public sector (public ownership ) can take several forms, including:

• Direct administration funded through taxation ; the delivering organization generally has no specific requirement to meet commercial success criteria, and production decisions are determined by government.

· Publicly owned corporations (in some contexts, "state-owned enterprises "); which differ from direct administration in that they have greater commercial freedoms and are expected to operate according to commercial criteria, and production decisions are not generally taken by government (although goals may be set for them by government).

•Partial outsourcing (of the scale many businesses do, e.g. for IT services), is considered a public sector model.

In spite of their name, public companies are not part of the public sector; they are a particular kind of private sector company that can offer their shares for sale to the general public.

In economics, the private sector is that part of the economy which is both run for private profit and is not controlled by the state. By contrast, enterprises that are part of the state are part of the public sector ; private, non-profit organizations are regarded as part of the voluntary sector .

Legal status: A variety of legal structures exist for private sector business organizations, depending on the jurisdiction in which they have their legal domicile. Individuals can conduct business without necessarily being part of any organization. In countries where the private sector is regulated or even forbidden, some types of priva

Внимание, отключите Adblock

Вы посетили наш сайт со включенным блокировщиком рекламы!
Ссылка для скачивания станет доступной сразу после отключения Adblock!

Скачать