Indonesia Economic System

Topics: Economic system, Macroeconomics, Economy Pages: 11 (3008 words) Published: March 1, 2015
“Indonesian Economy System”

Group 2:
Ida Ayu Lidya Kusuma Dewi1306305007 / 16
Ni Wayan Dewi Mas Yogi Pertiwi1306305008 / 17
Ni Putu Julita Diastiningsih1306305012 / 19
Ni Komang Urip Krisna Dewi1306305086 / 28
I Putu Adi Surya Lesmana1306305092 / 29
Ni Putu Intan Pradnyani1306305097 / 30
I Putu Gde Chandra Artha Aryasa1306305146 / 35

Basically there are only two economic systems that the market system and command system. Market economic system is also called the capitalist system. This system was originally used in the days of empire in England, the Netherlands, also in the days of empire in Indonesia used to be, for example, in the kingdom of Majapahit, Sriwijaya. At the time of this kingdom handed over to the private economy on the basis of demand and supply. In principle, the imperial never manage its economy. In the market or capitalist economic system is not known for any government intervention in the economy. All economic solution left to the market mechanism. With the passage of the economic system in the manner of the kingdom of Europe leads to prosperity in some communities like landlords, businessmen and the elite of society, while on the other hand resulted in squalor in some other community, especially the workers, and finally come up call for the workers unite . Of this movement then emerged a command economy or economic system "Marxist". Command system adopted by the Uni Soviet, China, and the country - east European socialist countries and is known as a communist or socialist economic system. The communist system all economic activities is a matter of state planning. Countries have a central role in the economy and basically no single country that follows the communist system. Whereas in the socialist system, the state also plays an important role in the economy of central planning is usually done though the actual role of demand and supply is still valid. Monetary and foreign exchange systems and companies are generally owned or controlled by the state. Then in about the year 1929 - 1930 the world depression, prices have decreased, many companies lay off their workers, this situation is known malaise (the Great Depression) and the state of the economy is regarded as a failure of the market or capitalist system. Many experts say that the situation is caused by excessive production, while on the other hand there are many who say that due to insufficient consumption. Then in 1936 with the publication of the book by J.M. Keynes called the General Theory of Employment, Interest and Money comes new economic flow that emphasizes the role of the state in the economy and is considered as a stream to cope with the current economic situation. This flow called Keynesian Economics. Thus the market follow the government's role in the economy. On the other communist countries of the Uni Soviet and China also experienced the destruction and allow some of the economic problems solved through the market process. So today no country in the world that fully capitalist (adopts a fully market) and also does not fully embrace the communist system (central planning). All countries in the world have recognized the importance of the state in the economy. The state intervened in the economy in socialist countries as it is through its ownership of state-owned enterprise, traffic exchange and foreign trade controlled by the state and centralized planning of economic development. While the economy of the market system of state interference do not through ownership but with a system that is capable of affecting supply and demand. Market economic system which recognizes the role of the state is usually referred to as the economic welfare system, and the country's so-called Welfare State. Role of the state through ownership at the beginning of the economic sector is the public needs such as air and ground...
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