Question

Economic Issues Confronting Our Economy. What are the fundamental economic issues confronting our economy? Please provide examples

Answer 1

Economic issues facing the world economy, as well as regions and countries, include prospects for growth, inflation, energy and the environment, inequality, labor issues, emerging markets, and the impact of new technologies.
Fundamental issues;
Production exchange and consumption of goods and services are among the basic economics activity of life .in the course basic activities every society has to face scarcity of resources and it is scarcity of resources that gives rise to the problem of choice and every society have to decide how to use its scarce resources . The problems of economy are very often summarised as follows;   
1)what to produce
In this society have to decide whether to produce more of food ,clothing,housing or to have more luxury goods. Whether to have more agricultural goods or to have industrial products and services.whether to have more consumption goods or to have investment goods (like machine) which will boost production and consumption tomorrow.

2)How to produce
Every society has to decide Whether to use labour intensive technology or to have capital intensive technology in production process . Labour intensive use more labour and creates more employment in country but take to much time in production process whereas capital intensive take very less time with very less labour force in production process.

3)For whom to produce
This problem is related to the distribution of goods & service in the economy.
It is related to the choice between
- Production of goods and services for richer section of society or
- Production of goods and services for the poorer section of society
Production of goods and service for poor leads to maximum social welfare, whereas production of goods and services for rich leads to more profit. For example, if an economy concentrates on the production of luxury goods, then this will improve the standard of living of rich class, but the life of poor will become more difficult. On the flip side, if an economy concentrates on the production of necessary goods, then this will serve the society but profits will reduce. Hence the problem of for whom to produce arises.