Agricultural and Industrial Economy
An economy is a system that provides people with goods and services and directly or indirectly satisfies their wants. In this article, you are going to read about Industrial Economy.
On the basis of their nature, economies are classified into the following categories:
- Simple or complex economy
- Closed or open economy
- Planned or unplanned economy
- Agricultural or industrial economy
What is Industrial Economy?
Industry and trade are the main occupations in this economy. Agricultural share is less in national income. Modern and complex techniques of production are used in this economy. Infrastructural facilitates are well provided for in this economy. Examples of this economy: United States of America, United Kingdom, Japan, Germany.
Difference between Agricultural and Industrial Economy
|Agricultural Economy||Industrial Economy|
|Agriculture is the main occupation in this economy.||Industry and trade are the main occupations|
in this economy.
|Agriculture constitutes a large share of the|
|Agricultural share is less in national income.|
|Traditional techniques of production are used in this economy.||Modern and complex techniques of production are used in this economy.|
|Basic infrastructural facilities are absent.||Infrastructural facilitates are well provided for|
in this economy.
|Examples of this economy: Brazil, Pakistan, Myanmar, Sri Lanka||Examples of this economy: United States of America, United Kingdom, Japan, German|
Economic Growth and Economic Development
Economic growth is an increase in the national income or per capita output over a period. It is a sign of quantitative growth in the country. On the other hand, economic development is a process where the real per capita income of a country increases over a period with a decrease in poverty ratio, unemployment, and income inequality.
The demand for goods and services arises from human wants. No individual in the whole world can fulfill all his/her wants. Wants are unlimited and means are limited. Thus, this scarcity of means in relation to wants brings forth the economic problem of how many resources should be used in satisfying different wants. In this way, one has to choose a set of wants from among unlimited wants which are to be satisfied with limited resources. Scarcity means a situation where only a limited amount of goods can be produced because of the existence of a limited amount of resources.
Central problems of an economy are the problems faced by and common to all kinds of economic systems. These include problems with decision-making about what to produce, how to produce, and whom to produce. This is because it is not possible for any economy to produce an unlimited variety of goods with limited resources.