Tutorial: Economic Lyceum Topic: State Economic Policy Prepared by: Ing. Lenka Gabrielová Projekt Anglicky v odborných předmětech, CZ.1.07/1.3.09/ je spolufinancován Evropským sociálním fondem a státním rozpočtem České republiky.

T HEORETICAL AND P RACTICAL E SSENTIALS OF E CONOMIC P OLICY

 Generally, economic policy is the government's approach to the economy of its country.  It is an activity in which members of economic policy (especially government) use certain tools and conferred competences to influence economic and social development (the economy as a whole or only its part), and tries to achieve certain economic goals.

 Economic policy is a combination of economic approach to social development that depends on politics.  The relationship between the economy and politics must be kept in a balance.  Economic policy can be considered as a set of tools that affect not only macroeconomic but also microeconomic area.

 It assumes that the activity of individuals requires a particular coordination, which is in a practical economic policy complemented by political and legal framework; therefore, practical economic policy is created.  It attempts to form a consistent system of goals and means, as well as the optimal conception of economic and political objectives and instruments.

 It is a set of intentions, acquisitions and agreements promoting regulation, influence and direct determination of economic activities.  Generally, it is determined by an economic level of a particular country.  An economic policy are given particular solutions that may serve as possible decisions. Theoretical policy does not take a political responsibility for these decisions.

 It is based on the theory of economic policy.  The theoretical economic policy offers certain alternative solutions that are possible for practical decisions of economic policy.  There is a fundamental difference between the theoretical and practical EP. The theoretical part of the economic policy does not take a responsibility for its claims unlike the practical one.

 It is influenced by political power and political opposing.  The practical economic policy considers not only the political, social and international situation, but also an approval or disapproval of the voters.

 A person by observing the self-interest, profit or benefit, is led by an invisible hand of the market → it helps to achieve a goal that is not primarily the priority → because if a person follows his own interest, he may often help the society much more effectively than if he tried to help the society consciously.  It optimizes the relationship between producers and consumers → it leads to an efficient allocation of labour and capital that is much more effective than if someone consciously aimed to it.

 Define a term ‚economic policy‘, its division and basic differences.  Give an example from a real life where ‚an invisible hand of the market‘ will function. Who was the author of this principle?

 HOLMAN, Robert: Ekonomie, 4. vydání, Praha: C.H. Beck 2005, ISBN  KASAN, Jan, ŽÁK, Milan: Hospodářská politika A, Praha, VŠE, 1992  SLANÝ, Antonín a kolektiv: Makroekonomická analýza a hospodářská politika, Praha, C. H. Beck, 2003, ISBN:  KLIKOVÁ, Christiana, KOTKLÁN, Igor: Hospodářská politika, Ostrava, Institut vzdělávání SOCRATES, s.r.o., 2006, ISBN:  VOSTROVSKÁ, Zdena, VORLÍČEK, Jan: Úvod do hospodářské a sociální politiky, Praha, VŠE, 2005  ŽÁK, Milan, NĚMCOVÁ, Ingeborg: Hospodářská politika I., Praha, VŠE 1998