AIU Online Macroeconomics
February 19, 2012
In this paper, I will define and explain a closed system and provide an example. I will define
and explain an open system and provide an example for it. I will also be explaining the inner and outer flows for both the closed and the open systems. I will then define and explain the leakages in an open system and define and explain the injections in an open system. Lastly, I will provide a personal example of a leakage and describe and explain it. I will also provide a personal example of an injection and describe and explain it to.
A closed system is an economic model that counts only domestic exchanges, but not foreign agents. A closed system is also a system that moves from the household to the business. There are also a flow of payments from businesses to homes. They also have very little, if any interaction at all with other systems or with the outside environment. The closed system method visualizes the organization as a way of management, technology, personnel, equipment, and materials but does not include competitors, suppliers, distributors, and governmental regulations. The closed system method allows supervisors and organizational planners to break down problems by looking at the inner shell of a business with very little thought to the outside environment. The viewpoint of the closed system looks at an organization much like a thermostat; restricted environmental input outside of changes in temperature is needed for efficient control. Once a thermostat is set, it takes very little upkeep in its ongoing, self-reinforcing purpose. The closed system outlook was the main system in the 1960’s and early 1970’s, association learning and research later highlighted the role of the environment. Throughout the early 1960’s and early 70’s it wasn’t that the managers didn’t notice the outside environment such as other associations, markets, government supervisions and the equivalent, but the strategies and other decision-making procedures of the closed system gave very little thought to the influence that these outside forces could have on the inside running of the association.
An open system is an economic model that counts the goods and services exchanged domestically and between nations. The confines of the open system, act together with many other systems or environments. An open system is much more flexible than a closed system. The open-system hypothesis started in the natural sciences and eventually spread to different fields such as: ecology, computer science, engineering, management, and psychotherapy. The point of view of the open system considers an organization as an individual that takes input from the environment, converts them, and then releases them as output in an arrangement with mutual effects on the organization itself, along with the environment in which the association runs. What this means, is that the association becomes part of the environment in which it is associated with. Open systems of an organization believe that other organizations are dependent upon their environments and these environments are also dependent upon the organizations. As the open-system strategies expanded among the organizational theorists, managers began to integrate these views into practice. The open-system approach serves as a type of business activity. What this means, is that business is an operation of converting inputs to outputs while also finding out that inputs are extracted from the...