Understanding the Economic System – In general, Understanding the system economy is a way to regulate and organize all economic activities in society carried out by the government or the private sector based on certain principles in order to achieve prosperity or prosperity.
Understanding the Economic System
Economic System

The economic system is a system used by a country to allocate its resources both to individuals and organizations in that country. The basic difference between an economic system and other economic systems is how the system regulates the factors of production. In some systems, an individual may own all the factors of production. While in other systems, all these factors are held by the government. Most economic systems in the world fall somewhere between these two extremes. Apart from factors of production, economic systems can also be distinguished by the way they regulate production and allocation.

In general, each country has three basic economic problems. The method used by the state to overcome these economic problems depends on the economic system adopted by the country. The economic system used by a country is influenced by the view of life or philosophy of life adopted by that country.
System economy that applies in a country is also influenced by the knowledge possessed, habits, and political factors that apply to the society concerned.

The following are the opinions of experts who define the meaning of the economic system, namely as follows:

  1. according to the opinion of Gilarso (1992: 486), the understanding of the economic system is the overall procedure for coordinating the behavior of the community (producers, consumers, governments, banks, and so on) in carrying out economic activities (production, distribution, consumption, investment, and so on) so that a single entity is formed. orderly and dynamic, and chaos can be avoided.
  2. according to Gregory Grossman and M. ManuThe definition of an economic system is a set of components or elements consisting of economic units and agents, as well as economic institutions that are not only interconnected and interacting but also to a certain extent mutually support and influence.
  3. Understanding the economic system according to McEachern is a set of mechanisms and institutions to answer the questions of what, how, and for whom goods and services are produced (what, how, and for whom).
  4. according to Chester A Bermand, understanding the economic system is an integrated unit that is cholestic in which there are parts and each part has its own characteristics and boundaries.
  5. Understanding the economic system according to Dumatry (1996) is a system that regulates and intertwines economic relations between human beings with a set of institutions in a resilience.

Reference :

  1. Putong.Iskandar, Introduction to Micro and Macroeconomics:Ghalia Indonesia, 2003
  2. Sukirno, Sadono, Introduction to Economic Theory, Rajawali Press, 2002
  3. http://myilmu Lintas Hukum.blogspot.co.id/2015/09/ Ekonomi.html
  4. http://myilmu Lintas Hukum.blogspot.co.id/2015/12/problematika-ekonomi.html
  5. Griffin R and Ronald Elbert. 2006. Business. New Jersey: Pearson Education