Economic institution and issue in
Pakistan
Economy:
The Production, Distribution and Consumption of Services by different agents is known as economy. It is
made up of:
Production
Distribution of Trade
Consumption of Goods
Consumption of Services
Importance of Economy:
The economy is an indicator of development and sustainability. A good economy ensures better chances
of survival and development or a state. If we understand the cycles and system in Economics, we can
better understand how to manage our money and society.
Economic System:
It is a system of production and exchange of goods and services as well as allocation of resources in a
society. -The two dominant economic systems in the world are capitalism and socialism. Most societies
have varying blends of the two systems. Common hybrids of capitalism and socialism are welfare
capitalism and state capitalism.
Economic institution and System
1: CAPITALISM:
It is a system under which resources and means of production are privately owned, citizens are
encouraged to seek profit for themselves, and success or failure of an enterprise is determined by free-
market competition.
EXAMPLE:
The United States is
one of the most
