Question

1. Types of economy and its features, advantages, disadvantages with examples.

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2. Three major problem of economy (1-what to produce/2-how to produce/3- for whom to produce)

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3. Explain in details The elements of the economic environment?

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4. What’s the difference between inflation and deflation and which one is worse?

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5. Economic Integration (The three levels [explain with examples and what are their benefits], types of economic integration)?

Question example: What are the benefits if I apply economic integration?

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6. What are the drivers of a global integration?

Question example: what encourages us to do integration?

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7. Mention 4 International strategies and explain one of them? / explain all 4?

When will each one work best?

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8. We have to know about economics of scale, Learning economics, location economics.

***Please note that the subject is international business

Answer 1

1) Economies or economic systems are of four types:

Command economy : In this the government owns and operates the institutions in the economy. There is less fairness or incentive to work since the market doesn't operate according to the buyers and sellers. Also there is no freedom to choose what to produce.

The advantages are that a welfare economy may be created since the command is with government.

Eg: China

Market economy: In this type of economy, only the demand and supply work and there is no intervention by any government or outside forces.

The advantages are that the sellers are able to produce more and according to market needs. They also are incentivised for the same.

The disadvantages are there would be higher unequal distribution, more money means higher goods and hence poor suffer.

Also sometimes the public goods wouldn't be produced because of less profitability.

Eg: USA, Japan

Mixed economy: Mixed economy is in which there are both components of socialist and capitalist economy.

Advantages are that state or government can provide for the public goods which the private sector doesn't provide.

Sometimes the over interference of government could result in welfare loss and this could cause not reaching the market equilibrium.

Eg: India

Traditional economy: In this system, the economic system is based on a particular tradition. It could be an agricultural economy or hunting and gathering. It is mostly among the tribal population.

There is less uncertainty, more stability. The disadvantage is that there is lack of incentive for new ideas and hence the standard or quality of life is the same.

Eg: Chad, villages in Africa

(Answered the first question as per the policy. You can comment for doubts)