Teaching programme: Economic lyceum Topic: Economic State 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.
A IMS, REPRESENTATIVES AND TOOLS OF E CONOMIC P OLICY
Economic policy consists of aims, tools, decision- making processes and measures of the state in particular economic fields. The most important goal of general policy, not only economic policy, is to maintain or establish peace, freedom and democracy. Another general aims of EP refer to general social values or fundamental social values, such as freedom and fairness, assurance and progress, safety and democracy.
The aims of economic policy differ according to the country, government and time period. Nowaday a modern democratic country follows two basic aims: Economic growth = a growth of real GDP Economic balance (stability)
It is measured according to the real economic growth – thus inflation is not involved The growing level of the product means a higher welfare of inhabitants in a particular country. Inhabitants may use a wider range of products and services to satisfy their needs.
Internal stability Full employment support Indicator = unemployment rate Maintenance of price stability Indicator = inflation rate (economists‘ opinion 1-3% a year) External stability Maintenance of balanced payment balance, stability of exchange rate Indicator = balance of the payment balance
Economic policy tools can be divided: Direct (a state can be in a direct position in the market; or it can issue specific rules by means of which it can reach particular aims). Indirect (a state forms general legal standards to influence a behaviour of economic subjects to fulfil a particular goal.
As representatives of an economic policy are considered the subjects that participate in the process of defining, implementation and monitoring of the economic policy. There exists a particular complex of institutions that perform tasks of the economic policy and these institutions are representatives of the economic policy. Their basic character is: Legitimacy The right to accept decisions To act as the subjects of economic policy in a limited sphere
These institutions can be divided into three groups: Decisive sphere – government, parliament, central bank, state offices; judicial, research and expert institutions and organizations Influential sphere – big companies, political parties and trade unions, scientific institutions, press Multinational organizations – UN, IMF, EU, OECD, WTO
Define following terms: inflation, hyperinflation, deflation. What are the side effects of inflation? Who is influenced positively and negatively? Name the forms of unemployment.
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