An economy can be considered effective if maximum profit indicators are achieved. Consider this issue in detail.
Performance Features
To begin with, an economy is effective if it has achieved full employment . To maximize profits, it is important that systematic reconciliations of costs and benefits are carried out.
Any economy is effective if it has rational relations between consumers and producers. Costs should be minimal and maximum benefits.
Efficiency issue
This issue is considered an important problem of the modern economy. In micro- and macroeconomic activities, a constant reconciliation of costs and results is assumed. Such activity helps to determine the best solutions to problems identified in the production, the search for new technology to reduce the cost of created goods. An economy is effective if it has achieved optimal indicators of costs, losses, profits.
What is meant by the term "economic efficiency"? This is an indicator that demonstrates the relationship between economic growth (result) and the costs that generated this effect. An economy is effective if it achieves maximum performance indicators of economic activity at minimum cost.
Experts warn that the efficiency of one business unit is not similar to the effectiveness of the overall system. Between them, there may be significant differences in performance, profitability.
Assessment factors
An economy is effective if certain indicators are achieved. For example, in the Soviet Union, about five hundred of such criteria for assessing the effectiveness of economic activity were used. A technical performance indicator involves taking into account the quality of the raw materials used, semi-finished products. Also taken into account is the progressiveness of the selected technology, the level of qualification of the staff.
An economy is effective if it has reached the maximum ratio between factor and effective efficiency. Resource indicators suggest an analysis of the relationship of production results to materials, capital, calculation of productivity, material consumption.
Specificity
Professionals consider labor productivity to be the main indicator of efficiency. At present, in our country it is 8 hours, which is much lower than the indicators existing in European countries. A country's economy is effective if it achieves maximum performance between employment and wages. In the US, annual income is about 64 thousand dollars, while in Russia it does not rise above 18 thousand dollars.
The overall effectiveness is usually considered as the ratio of the results to the current total costs. The calculation of profitability (efficiency) is carried out by dividing the profit by the costs incurred.
The economic system can be considered quite effective if, with limited resources, the needs of all representatives of society are satisfied. A state must be achieved when it is impossible to increase the degree of satisfaction of the needs of one person, while not worsening the situation of other representatives of society.
Company performance
Any economic object (company, enterprise) is considered effective from an economic point of view in the event that the production of products is carried out at low cost. A situation must be created in which, with a certain level of knowledge and the number of factors of production, it is no longer possible to produce a larger number of goods.
Specificity of performance evaluation
To test the effectiveness of the economic system, indicators of the level of development of the country's economy are currently being applied. It analyzes the total volume of domestic production per capita.
In addition, the assessment takes into account the state of the national sectoral economy, the creation of basic product options (durable goods, electric energy, food). When calculating economic efficiency, they do not disregard the quality and standard of living of the country's population.
By the number of production of different types of products per person, our country is significantly inferior to European countries. So, in Russia there are 33 cars per 100 families on average, while in the USA this indicator is 121 cars.
Conclusion
Among the main factors used to assess the effectiveness of the country's economy, the standard of living of the population is of particular importance.
In recent years, they also use such an indicator as the competitiveness of the economy. Of course, with its help it is difficult to talk about a full assessment of the economic efficiency of the country, you can analyze only its individual component.
Competitiveness implies the production, scientific, technical and economic opportunities of the state economy; therefore, it is an important component in the assessment system. The growth of living standards is considered the main indicator of a quality economy.
To increase the efficiency of the economy, it is important to use all types of resources, to create production in which, at minimum cost, profit will have maximum performance.