• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
  8. 8
  9. 9
  10. 10
  11. 11
  12. 12
  13. 13
  14. 14
  15. 15
  16. 16

Discuss the extent to which the economic theories in the Market's Reader can be applied to the "New Economy". (50 marks)

Extracts from this document...


A) Discuss the extent to which the economic theories in the Market's Reader can be applied to the "New Economy". (50 marks) In this question, I will define the old and new Economy, then I will mention the main characters of New Economy and what is different between new and old Economy. After that, I will discuss the role of knowledge, innovation, and individual creative and competitive as the primary resource needed to create economic wealth. Then, I will discuss Innovation reduce costs and improve product quality and how advances technology achieve the cost reduction and reserve the economic scale in good level. finally I will Study the Economic theories in market reader, clearifing how it could use and ably in the new economy. It may be helpful to describe the "old economy" before I talk about the "new economy." From around 1938 to 1974, the economy was built on a manufacturing base geared toward standardized production (It was manual labor) (1). It was organized into stable, hierarchical and generally autocratic organizations. These organizations achieved a competitive edge in the market by making standardized products faster and more economically. They focused on incremental cost reductions and a national marketplace. This is how success and prosperity were achieved in most courtiers, examples of type of organization could be found in textile and steel mills. This economic order began breaking down between the mid-1970s and the early 1990s. The crisis included both textiles and steel in a period of transition from the old economic order to the new one. a lot of countries loss their competitive edge because other countries were making things faster and cheaper. The cheap labor which had brought industries to the South was being very cheap. At the same time, workers also began wanting a higher standard of living, wanting cars, televisions, washing machines, better clothes and homes, wanting a chance to educate their children. ...read more.


When these activities have been adequately addressed, the Government must then take some definitive action to promote the sector and to adopt use of the technologies in their dealings with their citizens. The government uses three basic institutions to protect individual rights in a market economy. Police protection is used to prevent individuals within a society from violating one another's rights. National defense is used to protect the rights of individuals within a nation from foreign aggressors. The courts and criminal justice system are used to resolve disputes among individuals within a society so that those who have disagreements do not have to resort to the use of force to settle their disputes. In all cases, the use of government to protect individual rights is intended to create a system in which all individuals interact with one another through voluntary agreement, and the legitimate use of force against others is reserved to the government. B- Stabilization The Government's role is not only to pick winners, but to improve the conditions within which all businesses and employees operate. Under its new model of partnership with business, the Government is therefore acting to promote economic stability, improve the legal and regulatory framework, and promote innovation, high-quality investment and employment opportunity. the government could productively get involved in creating a more stable economic environment. In response to banking crises that would occur during recessions, Congress created the Federal Reserve System in 1913 to stabilize the banking system. A host of stabilizing programs appeared during the Great Depression, and, after World War II, the government explicitly pledged itself to pursue policies that would produce full employment. Monetary policy and fiscal policy are the primary tools that are used to stabilize the economy. Monetary policy is aimed at controlling the money supply and the banking industry, while fiscal policy uses taxes and government expenditures for the purpose of maintaining full employment and low inflation. ...read more.


Sony accelerated the structural reform of its entire electronic business and positioned Aiwa as a wholly-owned subsidiary in order to enhance its overall corporate value and corporate resources will be further concentrated in realizing the Ubiquitous Value Network, which is at the heart of Sony's growth strategy. The company continued in its partnering efforts by forming soft alliances with Real Networks reflecting the rapid expansion in network distribution of digital audio and video content to personal computers and a new generation of networked consumer electronics products. The goal here was to make Sony a leading Global Media and Technology company. In handheld devices, Sony finally proved itself a strong competitor after stumbling at first. It accomplished this by using the same strategy that made its Walk Man one of the most successful consumer products ever, releasing half dozen new models covering every price range. Initial efforts had fell flat on their face because of lackluster design and high prices. The year also marked the company's restructuring of its sales and distribution channels. In addition to the existing structures based on product categories, a new organization was set to be established, that would focus exclusively on mass-retailers, in an attempt to foster close knitted relationships and improve communications with its consumers. The strategies that Sony must continue to pursue are: it must keep itself ahead of the change curve. In order to do so, the company must be able anticipate the direction of the change. Second, it must be able to focus and make the change happen. Also, Sony as a company needs to redefine itself from a business perspective, demonstrating that Sony is a consumer electronics products company, not a gaming company. For the market of consumer electronics is an ever-growing market and will always be significantly greater than the target market for games, which only includes a small segment consisting mainly of children and teenagers. However, from a holistic point of view, Sony should strengthen and maximize the brand value of its core sectors- electronics, games and content (music and picture). ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Economics - Classical School of Thought, Keynesian School of Thought, Supply Side School of ...

    This would result in having to deal with policies with unpleasant results such as restrictions of money supplies high interest rates and tax increases. Supply siders believe that by increasing our productivity, we can increase aggregate supply to shift right (increase) keeping prices levels the same. (Supply side disinflation-Graph 2.3)

  2. Main characteristics of free market economy

    where the majority of the population cannot afford to acquire the goods and services. Additionally, to control the inflation the government will increase the interest rates where it will make the consumption of goods and services expensive compared to before.

  1. Use game theory to analyze an oligopoly competition of two great rivals, Wal-Mart and ...

    This meant that Wal-Mart's presence in China increased dramatically in 2000/2001. Almost as many stores were opened in 2001 as in the previous five years of operations. Now the chain seems to be intent on catching up with Carrefour and is expanding out of Southern China into Beijing and other provincial cities.

  2. Outline the reasons why the process of industrialization in developing countries might require government ...

    Although it is quite hard to show quantitatively the relationship between investment in education and economic development, it is logical to assume that by creating a more skilled workforce through education that productivity may increase leading to a decrease in underemployment, it is also obvious that the expansion of formal

  1. The efficient market (socially desirable) equilibrium levels of price and output. What action might ...

    At any given quantity, the social value curve (Ds) is below the private value curve Dp, the difference between the two curves showing the cost of the externality. In an efficient market the optimal resource allocation will be at Es, where the supply curve crosses Ds, because the social value of the product exceeds the private cost of additional product by suppliers.

  2. Discuss the policy options the Australian Government can use to achieve external stability

    Government macroeconomic policy is aimed to stabilize fluctuations in the business cycle. Unwarranted fluctuations in the business cycle can lead to severe levels of inflation in booms, which will mean a blow out in the CAD, and excessive levels of unemployment in recessions as shown in Diagram 1.5, this is why macroeconomic policies are known as counter cyclical policies.

  1. What do you Consider the Key Elements of "New Classical" Macroeconomics? What are the ...

    by workers, who mistakably calculate the projected price level, as a result of the imperfect information to which they are exposed. A graphical representation of Friedman's 'fooling model' can be seen below; Figure 1 An important element, added by Friedman, which was not present in Keynesian models, was that the

  2. How does Coase account for existence of firms and what factors does he suggest ...

    three problems in relation to the factors that limit the growth of the firms. * The costs of organising additional transactions internally may rise as well as decreasing returns as firms increase in its size. The cost of an additional transaction within the firm maybe equal to transacting within the market.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work