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Givova’s Economic System
Introduction.
An economic system is the means by which a governing entity determines the distribution
of factors of production, trade goods and services. The factors of production in question
include capital, labour, information resources and physical resources. The various types of
economic systems view the employment of these factors in the production process differently
and these include command economies, market economies and mixed economies. In this
paper we lay our focus on Givova’s Economic system which is a mixed economy with
Tim Howard as its leader and Yala as the capital city of Givova. Howard’s government has
Chosen to adopt the mixed economic system in order to incorporate both aspects of
A planned economy and market economy where the means of production are privately owned
with government intervention being a key component in order to achieve balanced and rapid
economic growth. The market is partially free where individuals in the private sector are
free to make and implement economic decisions allowing the laws of demand and supply to
determine prices, while on the other hand the government has the mandate to intervene at any
point in order to protect the market and achieve economic stability.
The Givovan government is charged with the mandate to coordinate economic activity
where it creates a central plan to govern economic activities. The central plan created by the
government protects competition where it ensures equal opportunity to its citizens and also
protecting them from international competition hence ensuring the growth of the economy.
Drawing an example from ancient Greek economy which heavily relied on imported goods
signified by its high dependence on crop imports as a result of poor Agricultural soil in
Greece. Other heavily imported products included wood, glass and metal such as Tin. This
in turn resulted in the economic downfall witnessed in Greece. This clearly depicts the need
for government intervention to protect its economy from external competition offered by
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other economies to its citizens. Government intervention through implementation of fiscal
policies also ensures protection of the market from inflation and deflation. It ensures the
stability of prices and cash flow through the central bank and determination of interest rates.
This helps in stabilizing both demand and supply and also encourages the growth of already
established businesses and the inception of new ones.
The main Economic goal for the Givovan government over the next twenty years is an
efficient economy with equity, full employment and stability. The Givovan government
is keen on ensuring that in the next twenty years economic growth is achieved with equity
being a key component. Historically nothing has worked better than economic growth in
enabling societies to improve the life chances of their members, including those at the very
bottom (Rodrik 3). With its citizens as the most important factor, the Givovan government
has their best interests at heart with an aim of ensuring higher and better living standards
and a successful economy.
Provision of Social Mobility
Social mobility refers to the movement from one social class to another and this may be
Classified with respect to occupational status or family background. Social mobility can be
quantified in either absolute or relative terms that are determined from social mobility
computations. The types of social mobility includes horizontal mobility which occurs when
an individual shifts their occupation but still remain within the same social status, vertical
social mobility that occurs when one changes their social status in the society either upwards
or downwards, inter-generational mobility that occurs between generations for instance
transition either upwards or downwards between parents and their children, and
intra-generational mobility that occurs within the lifespan of a single generation.
The Givovan government aims at ensuring high social mobility for its citizens as this will
ensure robust economic growth and better living standards over time. The government
intends to achieve this first by ensuring easy and free access to high quality formal
education for all citizens regardless of the economic class they belong to. Access to high
quality education shall be funded by the government from basic primary education all
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the way to tertiary level education to achieve a highly skilled an knowledgeable population
that will in turn result in high productivity hence economic growth. Provision of high quality
accessible education to all facilitates both upward and intergenerational mobility where the
acquisition of skills secures individuals better positions in the labour market.
Second, the government intends to achieve success in the labour market by creating job
opportunities for its citizens. Rigidity and insecurity in the labour market majorly caused by
short term contracts and scarcity of opportunities result in exclusion of the disadvantaged in
the economy limiting chances of upward mobility. The government intends to avoid this by
creating equal opportunities for every citizen to encourage inclusivity. Tax policies shall be
implemented too whereby individuals higher placed in the society will be suggested to
heavier taxation as compared to individuals in the lower social class in order to bridge the
gap between the privileged and the less privileged in the society. Lastly, the government
intends to ensure the provision of quality, accessible, free health services to all citizens since
a healthier nation implies better work force ad higher productivity. This directly influences
social mobility where citizens will get achieve their economic needs with ease. Drawing an
example from the black death plague in Europe that resulted in the death of more than 20
Million people, lords who owned land had a difficult time accessing peasants to work for
them and the few that were available kept demanding for higher wages creating further
chaos. This points out the importance of social mobility in the society in order to create a
balance for sustenance of the economy.
Economic Institutions
Grief defines as a system of social factors such as rules, beliefs, norms and organizations
that guide, enable and constrain the action of individuals thereby generating regularities of
behaviour (255). Economic institutions are the key points in an economy that bring about
difference in economic development. They have played an important role in facilitating
technological progress thus overcoming Malthusian stagnation in the ancient economy. Black
death resulted in the rise of income and the political power of the peasant communities
leading to redistribution of resources leading to effectively functioning markets and
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governments that respect and enforce all property rights of every citizen. The Givovan
economy is mainly comprised of free markets, private property and competition economic
institutions. The key goal for these economic institutions is steady economic growth
characterised with stability in prices in order to achieve full employment.
Free markets encourage innovation by individuals or firms within the economy since it
eliminates bureaucracy experienced in a capitalistic market. Firms and individuals have the
incentive to produce what the market demands since operations in the market are determined
by the forces of demand and supply. It is characterised with optimal allocation of resources
within the economy and this will support economic growth that is evenly spread within the
population achieving full employment in the long run. The presence of private sector in the
economy ensures efficient capital flow since it’s a major contributor to national income and
is one of the biggest employers within the market. It contributes heavily to tax and revenue
collected in the economy, all these boost the economy facilitating growth and employment.
The market is characterised by competition between firms and individuals, both producers
and consumers. Competition helps attain balance in the economy with stability in prices since
the forces of demand and supply determine price. It also ensures the delivery of quality goods
and services since producers face competition within the market forcing them to meet set
standards. All these enhance economic growth and stability within the country.
The Givovan economic system will ensure the perfect coexistence and functioning of
these institutions simultaneously working towards the goal of achieving economic growth.
For instance, the government will establish laws that encourage healthy and fair competition
within the market. This will involve the protection of small firms that are starting out and
providing them with loans at fair interest rates and subsidies that will in turn encourage small
start ups that will grow and help in achieving full employment. The government shall support
the private sector by providing grants where necessary to keep the economy running and also
protect it from international competition by limiting and setting restrictions on imports while
building diplomatic relations with other countries to establish economic ties that will in turn
encourage export of goods and services.
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Fairness and Equity
Questions of fairness, distribution and equality play an important role in economics and
policy analysis and that efficiency and fairness are the two main goals for appraising how
well an economy is doing and for devising, implementing and evaluating economic policy
(Dutt A. K. and Wilbe C. K. 175). Equality involves same treatment or compensation to
individuals that perform the same task while fairness on the other hand involves the provision
of equal opportunity to every citizen irregardless of their economic background or social
status. The main goal of the Givovan economy is to attain an equal opportunity market
where every citizen, firm and entrepreneur receive equal services from the central
government without discrimination and attain fairness where each and every individual is
subjected to the same opportunities irregardless of their position in the society.
Economies have in the past protected fairness by providing adequate systems of transport,
logistics and customs, providing financial markets, information technology and proper
connectivity in telecommunication and providing a fair regulatory environment to encourage
new investments and start-ups. The Givovan government is keen on providing efficient
transport systems by launching projects that involve the construction of super highways,
carriage ways, standard gauge railways and airports to facilitate efficient transport of goods
and services for purposes of growing and expanding the economy. It shall also implement
custom policies that will encourage international trade and protect locally bred investments
from international competition both by encouraging bilateral and multilateral trade and
imposing high duty customs on imported goods and services. The government looks to
provide financial markets in form of grants, loans with fair interest rates and tax subsidies
that will in turn encourage investment and growth of locally bred firms. These actions
implemented by the government shall protect fairness within the economy from societal evil
such as unfair competition and monopoly. This ensures a healthy and robust economy that
grows constantly and in the long run achieving the main economic goal of growth, full
employment and price stability in the country.
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Conclusion.
In conclusion, the Givovan economy in relation to the current world of today is at the
developing stage with the potential of rapidly growing and competing in the global market as
a strongly established economy within the next twenty years. This class has helped me have a
clear and in-depth perspective of where our priorities as an economy should be focused with
regard to the economic goals we intend to achieve as a country.
Work Cited.
Cameron Rondo and Neal Larry. A Concise History of The World. New York: Oxford
University, 2003
Dutt A. K. and Wilbe C.K. Fairness Distribution And Equality In Economics And Ethics
University of Lausanne, 2010
Grief A. The Fundamental Problem Of Exchange: A Research Agenda In Historical
Institutional Analysis. Economic Review of Economic History, 2000.
Johnson Steve and Nun Alise. Factors Influencing Social Mobility. University of
Derby, January 2007.
Wong Billy and Becky Francis. Reviewing the Evidence on What Is Preventing Social
Mobility. University of Reading, March 2013.