Economics Sectors (Ch. 2.1)
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Chapter 2 - Economic Sectors
Learning Objective: Structuring an Economy
The economy of a country is made of different sectors of its economy:
The balance of these sectors in the economies of different countries varies substantially. It depends on the level of industrialization in each country:
We now completely understand the different sectors of an economy: primary, secondary, and tertiary. Companies within these different sectors can either be private or public:
Most economies around the world are considered to be mixed economies - in other words, economies that are made out of private and public companies simultaneously. Some countries are close to a free-market economy, a situation in which most economic resources are owned and controlled by the private sector with little intervention of the public sector. Command economies, however, are the opposite of free-market ones.
Public and private businesses are different in their decisions:
Let's dive in to understand Public-Sector Companies:
- These public-sector enterprises usually include health and education services, defense, and public law and order.
- Important strategic industries, such as energy, water supply and public transport, are also owned and controlled by the state as public corporations.
Public-sector business' objectives are based on what most of the population needs. Public companies are not driven by profit but by their social objectives and they are funded by tax income.
In the private-sector, however, the story is different. Businesses are motivated by profit and their ownership is on the hands of one or multiple individuals - not the state.
To-Do List:
Chapter 2 - Economic Sectors
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