Privatization

I have read an article about privatization and the reasons of it.

So, first of all, privatization it is a process of transfering ownership of a business or public service from public sector to the private sector. if we look on privatization better, we can understand, that actually can not guarantee the progress in economics,but privatization increase rivalry on a market.

Also I have known some information that, there are three types of privatization: Share issue privatization, Asset sale privatization and Voucher privatization.

Share issue privatization it is a privatization,where selling shares on a stock market

Asset sale privatization it is a privatization where selling entire firm to a strategic investor, usually by auction.

Voucher privatization it is a privatization where sharing of ownership are distributed to all citizens, usually for free or at a very low price.

Actually privatization it is a positive thing for government, because privatization increase rivalry on the market, therefore economic growth will increase,what is good for a country.

Chapter 6, definitions

Fiscal policy-the taxation and spending decisions of a government.

Monetary policy-central bank and/or government decisions on the rate of interest,the money supply and the exchange rate.

Supply-side policies-policies designed to increase aggregate supply by improving the efficiency of labour and product markets.

Relationary:of policy measures designed to increase aggregate demand.

Deflationary: of policy measures designed to reduce aggregate demand.

Discretionary fiscal policy-deliberate changes in government spending and taxation designed to influence aggregate demand.

Automatic stabilisiers-forms of government spending and taxation that change automatically to offset fluctuations in economic activity.

Economic cycle-the tendency for economic activity to fluctuate outside its trend growth rate,moving from a high level of economic activity (boom) to negative economic growth (recession)

Progressive tax-a tax that takes a higher percentage from the income of the rich.

Regressive tax-a tax that takes a greater percentage from the income of the poor.

Recession-a fall in real GDP over a period of six months or more.

Human capital:education,training and experience that a worker,or group of workers,possesses.

Tariff-a tax on imports.
Quota-a limit on imports.

Occupational immobility of labour-difficulty in moving from one type of job to another.

Protectionism-the protection of domestic industries from foreign competiton.

Voluntary export restraint (VER)-a limit placed on imports from a country with the agreement of that country's government.

Balance of payments

I am going to tell you about some information about balance of payments. Balance of payments it is a record of money flows coming in and going out of country.

Balance of payments it is a monetary deals between country with another countries of the world. These deals include imports and expports of goods, services or financial transfers. Balance of payments is making deals for a specific periods and they are happening in a single currency, usually the domestic currency for the country concerned. Balance of payments usually is using for imports and exports, for example: if a country is importing is more than exporting, it will be a trade balance deficit.

Int he past, governments emphasised on achieving a satisfactroy balance of payments positions, particularly on trade in goods and services. But nowadays government may not be concerned on the short term of expenditure which exceeds export revenue. And for government is better to see an increase in competitiveness of their producers, because it will maintain aggregate demand and output high in the economy.

Economic growth

I have read an article about economic growth and why governments try to achieve economic growth.

First of full, economic growth it is an increase in real GDP and an increase in productive capacity, which shows us the maximum output that the economy can produce.

Why governments want to achieve economic growth? The most important reason for that is that government wants to gain a benefit from it and it is including increasing material living standards. And government point out that economic growth has to include stability, because with stability, economic growth will be achieved.

For government of the country it is very important to have a sustainable economic growth, because it will stant for all the time, another words-stable economic growth, which can be maintained year after year and that can be enjoyed generation after generation. And I think that economic growth it's a really important thing for country, because in countries where economic growth is high, therefore conditions of living are much better and unemployment is lower.For achieving economic growth government should avoid the costs which arise from a negative output gap, such as unemployment and positive output gap, such as inflation.

Definitions

Economic growth: in the short run, an increase in real GDP, and in the long run, an increase in productive capacity, that is, in the maximum output that the economy can produce.


Unemployment: a situation where people are out of work but are willing and able to work.


Labour force: the people who are employed and unemployed, that is, those who are economically active.

Economically inactive: people of working age who are neither nor unempoyed.

Deflation: a sustained fall in the general price level.

Balance of payments: a record of money flows coming in and going out of a country.

Elastic: responsive to a change in market conditions.

Inflation rate: the percentage increase in the price level over a period of time.

Trend growth: the expected increase in potential output over time. It is a measure of how fast the economy can grow without generating inflation.

Full employment: a situation where those wanting and able to work can find employment at the going wage rate.

Hyperinflation: an inflation rate above 50 per cent.

Nominal GDP: output measured in current prices and so not adjusted for inflation.

Informal economy: economic activity that is not rec[orded or registered with the authorities in order to avoid paying tax or complying with regulations, or because the activity is illegal.