Understanding Economic Activity and Systems: A Comprehensive Guide

Posted on Jan 8, 2024 in Economy

Economic Activity

The combination of tasks undertaken by people to obtain goods to meet their needs, which can be material or services.

Sectors of Economic Activities

• Primary sector (goods): extraction of natural resources
• Secondary sector (goods): transforming natural resources
• Tertiary sector (services): providing services

Components of Economic Activities

• Production: number of goods resulting from economic activity
• Distribution: transfer of products to consumers
• Consumption: use of goods resulting from production

Economic Activities

• Economic circuit
• Families: spend money to satisfy needs, sell labor, pay taxes
• State: produces goods and services, provides welfare, levies taxes
• Businesses: produce, distribute, sell goods for economic profit

Producer Factors

• Natural resources: renewable and non-renewable
• Capital: non-natural resources for production
• Technology: knowledge, methods, and procedures
• Labour: physical or intellectual effort

Economic Systems

• Capitalism: regulated by the market, private property, free competition
• Socialist: regulated by the state, state ownership, economic planning
• Mixed systems: combine market economy with state intervention