Google
Sunday 
December 16, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
ACTUAL INVESTMENT: Investment expenditures that the business sector actual undertakes during a given time period, including both planned investment and any unplanned inventory changes. This is a critical component of Keynesian economics and the analysis of macroeconomic equilibrium, which occurs when actual investment is equal to planned investment. The difference between planned and actual investment is unplanned investment, which is inventory changes caused by a difference between aggregate expenditures and aggregate output. Should actual and planned investment differ, then aggregate expenditures are not equal to aggregate output, and the macroeconomy is not in equilibrium.

Visit the GLOSS*arama


MARKET-ORIENTED ECONOMY:

A mixed economy that relies heavily on markets to answer the three questions of allocation, but with a modest amount of government involvement. While it is commonly termed capitalism, the term market-oriented economy is much more descriptive of the structure of the economy. The United States is the primary example of a market-oriented economy.
A market-oriented economy takes to heart the fifth rule of imperfection. Such an economy relies predominately on the efficiency of competitive markets to allocate resources, but governments enter the fray with economic policies to address market failures, business cycles, and other problems that might arise. The United States, for example, answers about two-thirds to three-fourths of the economy's resource allocation questions with markets. The remaining one-fourth to one-third are answered by governments.

The key institutions that form the foundation of a market-oriented economy are:

  1. Private Property: Private individuals, rather than governments, are the primary owners of resources, goods, and other assets.

  2. Individual Freedom: Those who own resources, goods, and other assets have the freedom to use their property as they see fit.

  3. Competitive Markets: Market are used to exchange privately owned commodities and to answer the three questions of allocation.

These three institutions create an economic environment that provides the incentives to achieve efficiency. In a market-oriented economy, buyers and sellers have the freedom to direct their resources through competitive markets to the highest valued uses.

A market-oriented economy, however, is definitely a mixed economy. While most allocation decisions are made voluntarily through market exchanges, governments also impose choices on the economy through regulations, taxes, and spending.

Two key functions that governments provide in a market-oriented economy are:

  1. Legal System: Governments operate the legal system to establish the "rules of the game" and maintain order throughout society. Without such order individuals are discouraged from undertaking voluntary market exchanges.

  2. Public Goods: Governments provide public goods, like national defense and education, that cannot be efficiently provided through voluntary market exchanges. These goods are provided directly through taxes and spending or indirectly through regulatory oversight.

<= MARKET FOR LEMONSMARKET SHARE =>


Recommended Citation:

MARKET-ORIENTED ECONOMY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: December 16, 2018].


Check Out These Related Terms...

     | capitalism | free enterprise | laissez faire | socialism | communism | market socialism |


Or For A Little Background...

     | economic system | mixed economy | economy | private sector | public sector | paternalism | fifth rule of imperfection | institution |


And For Further Study...

     | economic goals | political views | distribution standards | three questions of allocation | government functions | second economic rules | production possibilities | circular flow | business cycles | gross domestic product | unemployment | inflation |


Search Again?

Back to the WEB*pedia


APLS

GRAY SKITTERY
[What's This?]

Today, you are likely to spend a great deal of time at a garage sale hoping to buy either a package of blank rewritable CDs or yellow cotton balls. Be on the lookout for defective microphones.
Your Complete Scope

This isn't me! What am I?

Mark Twain said "I wonder how much it would take to buy soap buble if there was only one in the world."
"If things are not going well with you, begin your effort at correcting the situation by carefully examining the service you are rendering, and especially the spirit in which you are rendering it."

-- Roger Babson, statistician and columnist

BST
Bulk Supply Tariff
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster