National economy

The national economy is the system of reproduction that has developed in the course of historical development throughout the country, which represents a whole complex of interconnected industries and industries that belong to a particular state.

From the point of view of the macroeconomic theory, the national economy includes four macroeconomic entities: households, the business sector, the public sector and the overseas sector.

The household sector forms production factors that are privately owned, the proceeds from the sale of these factors are used for consumption and savings. This sector strives to achieve maximum consumption and lowest costs for it.

The enterprise sector, which is a set of private firms in the country that have a demand for factors of production, forms a supply of goods and services, produces investment. This sector in its activities seeks to maximize entrepreneurial profit.

The public sector is aimed at creating public goods (security, science, infrastructure services). He also seeks to extract profit and creates the conditions for the best functioning of the country's economy.

The overseas sector is the aggregate of foreign state institutions and entities outside the borders of the country. His condition is indicative of the balance of payments and the exchange rate.

All sectors are in interaction. Through the market of factors of production from households come the factors of production (land, capital, entrepreneurship, labor). Then through the market of goods to the households from the enterprise sector material, as well as non-material benefits arrive. The movement of all real flows of resources and finished products is simultaneously accompanied by cash flows moving towards them.

State management of the economy assumes the direct participation of the state in all these processes. It accumulates taxes from households and firms, while providing them with transfers and subsidies.

The national economy is often understood as a national economy of the country. It is inextricably linked and act in unity exchange, production, distribution, consumption of services, goods and values.

The national economy is a product of the development of society. The signs of the national economy are: the common economic space; Single legislation, monetary unit, general monetary and financial system; Close ties between economic entities with a national reproductive circuit; Territorial certainty with a single economic center, which is assigned the implementation of a regulatory and coordinating role.

Each subject of the national economy has its own economic interests. Their coordination is carried out through the operation of objective economic laws.

The national economy strives for efficiency, stability and justice through the implementation of important measures, such as ensuring the growth of national production, the desire for a maximum employment level, a stable price level, and maintaining a balanced external balance that ensures public administration in the economic sphere. In this direction, state bodies act through the use of various instruments of macroeconomic regulation: fiscal, monetary, foreign economic and income management policies.

The main goal of the national economy is to increase national economic wealth, maximize the use of limited resources, and increase the volume of profitable productions of goods and services.