Economic knowledge: the way of resource allocation

China institutions bring economic knowledge "Resource Allocation Mode" to everyone, hoping to help candidates prepare for the examination of institutions smoothly.

Economic activities are closely related to each of us. At the beginning of studying economics, we must first understand that economics studies the scarcity of resources, so the way of resource allocation has emerged. Under the modern economic conditions, there are two main ways to allocate resources: planned allocation and market allocation, that is, planned adjustment and market adjustment.

I. Planning and configuration

1. The main body of the planned distribution mode is the government.

2. Ways to realize resource allocation through the process of planning mechanism.

3. Planning mechanism refers to the restrictive relationship and regulatory role of planning elements such as planning indicators, economic levers and economic policies.

4. The planning mechanism belongs to pre-adjustment and is adjusted by the "visible hand". This theory comes from the General Theory of Employment, Interest and Money written by British economist Keynes.

Second, the market allocation

1. Meaning: Market allocation mode is a way to allocate resources by relying on market mechanism. In essence, it is the regulation of the law of value. Market supervision is a kind of post-event supervision, which is supervised by the "invisible hand" (this theory comes from Adam Smith-The Wealth of Nations).

2. Market allocation mechanism

(1) Price mechanism: It reflects the organic connection and operation between the supply and demand of products and prices in the commodity market. Price mechanism is the most important market mechanism in commodity market. Price mechanism is the basis of market mechanism and the core mechanism of market resource allocation.

(2) Supply and demand mechanism: reflecting the internal relationship between price and supply and demand. Its function is based on the imbalance between supply and demand.

(3) Competition mechanism: The direct cause of competition is the difference of economic benefits obtained by different producers in exchange. Its function is achieved through competition within and between departments.

(4) Risk mechanism: It reflects the relationship between enterprise interests and enterprise risks (loss and bankruptcy). Bankruptcy is the highest functional form of risk mechanism and the most critical condition for its operation.

3. Advantages and disadvantages of market regulation