The economy is a very large set of activities consumption and productivity that help in determining how scarce resources are allocated the economy depends on Supply and Demand. Let's talk about what types of economy.
Economy types:-
1)- Traditional Economy:- The traditional economic system is based on the contribution of each member of society in a specific role, given that they are responsible for the progress and prosperity of society; Through work, agriculture, industry, commerce, and all actions that affect the economy of the state, the traditional economic system is one of the oldest types of economic systems. 2)- Command economy:- Command economy In a command economic system, governments, and central authorities control most commercial and economic operations; such as the distribution of resources, goods, and basic services, and their provision to the state, and it has complete control over the distribution of valuable resources; such as oil and gas. 3)- Centrally Planned Economy:- Centrally Planned Economy In the centrally planned economic system, the state works on creating economic plans that guarantee the advancement of production and investment, in addition to the allocation of goods, services, and resources. To regulate fair trade agreements and to ensure compliance with international policies. 4)- The market economy:- The market economy is also called the free market system. Societies, companies, and those who have any interest in this system decide how to allocate and distribute resources, what will be produced and what will be sold, and thus the role of governments in this system is almost non-existent, but they can do many other things; such as fair trade, and the development of fair trade policies and processes. 5)- Mixed economy:- Mixed Economy A mixed economic system combines two or more economic systems; to form a single centralized system, for example; A mixed economy arises from the merging of a market economy with a command economy; To form an economic system in which the market is generally free of governmental or national ownership.
what is an economic crisis:-
The concept of economic crisis:- It is defined as a state of difficulty experienced by a country, society, or countries, as a result of an unusual situation of unexpected developments in the operation of the financial system and its components, which affects the economic situation negatively, and the economic crisis is a pivotal point that leads to a transformation of the economic situation This crisis occurs as a result of an imbalance in the economic balance between consumption and production, at the level of countries, the economic crisis is the result of negative repercussions in the economic and political structure of the state, and it is indicated that the concept of economic crisis He entered the literature of the social sciences in the sixties of the last century. Economic crises result from a general state of macroeconomic instability in a country, which leads to an acceleration in the case of economic deterioration, which is manifested in reduced production, bankruptcy of companies and individuals, high unemployment rates, damage to existing production relations, a collapse in the stock market, and a currency exchange crisis. Consequently, the living standards of the population decrease and the gross national product of the state decreases. The economic crisis may be limited to the banking sector only and may include other economic sectors to affect the economy of an entire country or region, and in some cases, it is a global crisis. Asset prices witness a sharp decline in their value during the economic crisis, and neither companies nor customers can pay their debts, and financial institutions suffer from a lack of liquidity, and the economic crisis usually causes panic among investors, and they rush to sell their properties or withdraw their money from bank savings accounts Fear of declining property values
The types of economic crisis:-
1)- Credit crises:-
This crisis is mainly related to the financial sector and refers to a shortage of credit funds in banks and other financial institutions
2)- The financial crises:-
is very similar to the credit crisis, but on a larger scale, and includes difficulty in obtaining financing, and is linked to the inability of banks and customers to borrow, which leads to banks suffering from a financing deficit.
3)- Public financial crisis:-
a financial crisis occurs as a result of governments trying to repay their debts and trying to borrow to cover their budget deficit.
4)- Currency crisis:-
a currency crisis occurs when there is a rapid devaluation of the currency, which makes investors in a state of fear of ownership in the country
5)- Hyperinflation:-
This crisis occurs when high inflation and a collapse in the value of the currency occur, making normal transactions difficult.
The social effects of economic crisis:-
Societies are affected by many social impacts as a result of the occurrence of economic crises, the most important of which are: high unemployment rates, and loss of income. It is noteworthy that economic crises lead to a state of economic contraction for countries, and thus disrupt economic growth, which hinders their progress in achieving the Millennium Development Goals and other internationally agreed development goals. During economic crises, families try to change spending patterns in an attempt to reduce their effects. Nevertheless, any economic crisis has negative effects on aspects of education, health, and nutrition, especially for children. On the other hand, economic crises may constitute an opportunity to achieve social progress by making Effective social protection, reconsidering the social effects of globalization, and searching for more inclusive and sustainable areas of growth. How to prevent the economic crisis? There are general guidelines that can be followed to avoid being affected by economic crises, and these guidelines include the following 1)- Provide approximately 3-6 months of living expenses, as this will help the individual in the event of losing his job. 2)- Searching for an experienced financial advisor, and consulting him in developing a specific financial plan that meets the needs of the individual or institution, identifying assets, and diversifying sources of income. 3)- Rebalancing the stakes once or twice during the year, deducting the profits from the successful investments, and pumping them into the investments of weak assets. the reviewer. 4)- Pay off all credit card debts and not accumulate them.
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