TEACHER:. Good for you. I see you remember my earlier conference on the economy very well.

STUDENT: Yes, and I also remember you asking “why should I, as a businessman, his interest in the macro economy”? Now I’ll ask you this … why should I, as a businessman, his interest in microeconomics?

PROFESSOR: Just because the economy is very relevant when a businessman is to make the environment in which he or she works to understand. An ability to help, the company can succeed, of course.

STUDENT: You mean that a good entrepreneur, I need to be a good economist?

TEACHER: Not exactly. A deep knowledge of the economy is neither necessary nor sufficient to be successful in business. However, a good foundation in business will help you in analyzing business situations much better. Now let me ask you something? Do you know what kind of economy is?

STUDENT: I ??do not remember such a thing as “the dismal science.”

PROFESSOR: It was long ago, when Malthus was very negative predictions about what would happen as the population grew faster than food production. No, that was the answer I had expected “the economy is a social science or behavioral problems is.” And that’s because the economy is focused on the behavior of people in different situations. Also, you know, was Malthus, does not it?

STUDENTS: Thomas Robert Malthus (1766-1834) was an English economist, sociologist, member of the clergy and a pioneer in the study of modern populations. Malthus argued that poverty and distress were inevitable because the population if not checked, increased faster than the availability of means of livelihood.
And back to your definition of the economy, what that means, what do economists to theorize about the behavior. Is that all?
TEACHERS: After congratulating you on your encyclopedic knowledge, let me tell you that the economy is a social science to the behavior of the economy, more precisely, the behavior of economic agents, which is after all attempts to explain to people. Of course, because the economy is not an exact science, economists are developing theories that are sometimes called models.

Student: And why and when these models are useful, a business owner?

TEACHER: The economic models are simplifications of the real world. It can be useful to explain how the world works. Of course, the ultimate test of how well the economy is the company … t really explain or predict exactly what the real world?

STUDENTS: Fine. And that’s the issue that we discuss in this first module of microeconomics?

TEACHER: We are some of the key issues that are of interest to economists and businessmen to describe. Later, you and I will discuss in detail.

To begin, let me say that all commercial enterprises operating in a market. Will you try to define a market?

STUDENT: Of course. A market is the environment to interact with the providers and seekers of a product or a service. And let me add that this interaction that determines what is produced and consumed and in what quantities.

TEACHERS: A very good “economic” definition. Of course, you say that this “determination of what is produced and consumed and how much” is through the price mechanism, the result of the interaction of buyers and sellers on the market.

STUDENT: Of course. And I can say is that, why should everyone a very firm understanding of the markets in which it operates and they have. But I have a question. Do all the activities of a company actually gets under way in a market?

TEACHER: Not necessarily. A key issue for managers, all the time question is: Should we X activity within an enterprise, or should we buy it on the market of another company? In other words … we should do or buy?

Student: So, is an activity in a company as an alternative to a market transaction.

TEACHER: Exactly. While companies are still operating in some markets, they also lead internal processes, and business leaders of the main problems is to decide which transactions within the company and those who should be left to market.

Student: I see, and it seems that lately there has been a strong tendency to “Agriculture” features have been.

PROFESSOR: Yes. Administrative tasks in manufacturing, more and more functions on the market charge. EDS and IBM, have increased their support for the activities of these companies and agriculture to industry to “pay producers’ increased significantly.

The Theory of the Firm

But let me expand on markets, and not to mention “the theory of the firm.” When we discuss how markets work, we focus primarily sold on the pricing and the quantity of certain products.

* The theory of the firm is used to examine the supply decisions of firms.
* The theory of consumer demand will help us predictions about how to create the demand in response to changes in key economic variables such as product price and consumer incomes change.

The economy of the company

While decisions in a large economy of a large number of participants, many individuals, one of the most important economic decision-making unit of the company’s business. Can you imagine why that is?

STUDENT: Well, this is the company’s business in an economic actor, the workers, the purchase of inputs, hired, manufactures and markets products on the market. Of course, a company can be in different ways from a legal perspective, sole proprietorships, partnerships, companies, etc. organized

PROFESSOR: Yes, but from an economic point of view is an entity in itself that is conceptually distinct from its owners and workers.

Student: And what is the conceptual difference between “business” of speech, and others such as “Business,” “Company,” “Company,” “Company”, etc?

TEACHER: In theory there is absolutely no difference to the broad definition as described above. When I “farm” the word that I will relate this broad definition. Of course, sometimes I will refer to certain types of companies, because in fact are important legal differences (but not economic) between a corporation and a partnership, for example.

Now allow me to discuss …

The elementary theory of the firm

We call it the elementary theory of the firm, because it simplify the “model”, we discuss a single product company, usually the product is believed to be produced.

STUDENT: Is not this an oversimplification?

TEACHER: No, to be applied, as can the principles for any business. What every company should as a rule for the production of a product?

Student: I am sure that the needs of plants and equipment and workers, equipment and ancillary activities are operated. It must also purchase inputs such as components, raw materials, energy, etc.

PROFESSOR: Yes. How can we, as a rule at the factory and the company employs a machine?

STUDENT: You have obviously refers to the land, buildings, machinery, tools, vehicles, etc. This is often referred to as capital goods or capital. But I am a little confused. There is no question that the land, buildings, etc., are the capital. But we have often talked about when we talk of capital money in the bank and other financial assets to speak.

PROFESSOR: Good point. In theory, the company “capital” is generally used to relate physical capital, such as facilities and equipment. Of course, the word capital is used correctly to mean financial assets, such as “working capital” is not invested in physical capital. But also in the theory of the firm in general, we c “meaning is use physical capital

STUDENTS: Fine, now I understand. But I have another question. Since the theory of the firm on a one-product-based companies, this means that the economy does not deal with multi-product company?

TEACHER: The economy can handle it very well with multi-product company. In fact, these companies are a major issue in the sector of the economy as Industrial Organization known. Do not worry, we are that question in one of the following modules to discuss this topic.

STUDENTS: Would you please summarize what exactly is the theory of the firm, in practice?

TEACHER: Of course. In the theory of the firm, we analyze how the technology used in production, combined with entry price, the unit costs that affect the performance is changed. We also discuss how to modify the request to the company’s products at different prices.

STUDENTS: Sounds good. And what is the purpose of this analysis?

TEACHER: What it means is that, given the cost structure at various levels of production and demand of the market at different prices, we can conclude that production to maximize the profits of the company.

Student: an accurate way of putting it, teacher.

TEACHER: Thank you. And since I “demand” is mentioned, let me tell you that the choices available to businesses in markets they sell to strongly influenced by competition in these markets.

STUDENTS: Just a few, and I would add that are restricted to a certain extent by the company to compete in the markets where they buy their inputs.

PROFESSOR: Yes. Competition in the market selling a business can be more or less intense, depending on the availability of similar products or more, potential substitutes, and the number and characteristics of competing firms. There are basically three types of markets in terms of the structure of competition.

Perfect competition

Under perfect competition, there are many companies in the market produce the same product and no business is large enough to influence market prices. Can you give you an example?

Student: I think they are not too many examples of industrial goods, but in general, to operate, producers of commodities such as grain, oil, etc. in perfect competition. A. Let me add that one of these conditions so that the market is constantly in need of perfect competition, all buyers and sellers of the current prices, to conduct information operations take place which has been forgotten.

TEACHER: Good observation. Not to describe …

Imperfect competition

The most common structure in which it operates imperfect competition. In this market there are a finite number of competing vendors, each selling differentiated products, in varying degrees, another is replaced. What kind of situation you speak of the types of businesses in these markets?

Student: I suppose that most companies decide how much to produce and sell at what price.

Teacher: Right. And of course they have to varying degrees, what to worry the competition. Now let me ask … this kind of competition do you think would be in stark contrast to perfect competition?

STUDENTS: M’s the word: monopoly!

Monopoly

TEACHER: That’s right, a monopoly. This is a situation where there is only one manufacturer of a product, is still the only manufacturer no competition from other local producers and the product can not be imported.

A monopoly has the power not only production but also to determine the price of the product.

STUDENT: That’s nice situation for any company to be in!

TEACHER: Of course. No other vendor can take market share from a monopolist. But while the monopoly may well be affected for the company, it is usually bad for consumers because the monopolist will tend to lead to higher prices than those that would prevail in a competitive situation for free.

STUDENT: Of course I’m sure that’s why most countries regulations to prohibit monopolies, or check if they can not be avoided, cases such as water, electricity and local telephone services.

TEACHER: These are examples of “natural” monopolies, in which consumers have dominant technologies, to pay more if multiple companies were competing in the market than they pay when a well-regulated monopoly is legal. The key word is “existing technologies”, long-distance calls are used to a year of natural monopoly to be there, but no longer the case thanks to modern communications technology.

The basic precondition for the operation of a monopoly is the existence of certain barriers to entry, as provided by patent protection.

But back to the most common type of market, imperfect competition. This type of contract between the two extremes of perfect competition and monopoly, and contains a number of different cases. In general, imperfect competition require products that are currently or in the minds of buyers, not similar but identical markets. Can you imagine a different state?

STUDENT: There are a limited number of potential producers, of which changes every other by its own conduct, performance, pricing, advertising, influence, etc.

PROFESSOR: Yes. The most common cases of imperfect competition is oligopolistic and monopolistic competition.

Oligopoly

Oligopoly exists where the market is dominated by a small group of competitors. Most large companies in these markets. I mention only one example of the PC (personal computer) industry. Here, each company is strong from what affected his rivals in price of the products and innovations in the area.

Monopolistic competition

In such markets there are many companies, but generally distinguished their products or services. The restoration is a good example, especially if one of the big chains. Every single restaurant does not belong to a chain, has a small share of the market competitive, but the difference is that the restaurant has some discretion over the prices. Why do you think that is?

STUDENT: Because, unlike the perfectly competitive markets, these products are not exactly the same. Restaurants are distinguished from the physical location, the type of food they offer, the quality of the food and service, atmosphere, prestige, etc. I’m sure that’s why they have some pricing power, but it is certainly a border. Eventually, customers will be willing to travel further for a meal and / or take on other types and qualities of food and service.

TEACHER: Exactly. Now we discuss the following topic: What determines the behavior of businesses?

Motivation of the company

What do you think is the best answer to this question?

Student: I would say, in a first approximation, that the company is trying to maximize profits. Let me add that the profits are defined as the difference between the income of the company (or gross income) and costs.

PROFESSOR: All companies try to maximize profits is not an unreasonable assumption, in fact, as most companies it seems to be interested in his money. The decisions that a company do in order to maximize their profits, are determined by the current state of the art.

Technology, inputs and the production function

Technology is the total available knowledge about the production of certain goods or services. The companies are limited by the current state of the art. In its decisions, the company must be considered.

The entrance is everything the company uses in its production, machinery, energy, raw materials, labor, etc.

The production function

For the final product, the production function the relationship between the quantities of various inputs per period and the maximum amount of product that can be produced through time is used.

Well, the study, analysis of the production process, we assume that all inputs can be classified into two categories. Can you guess what these two categories?

Student: I can try. Some entries are fixed (for example, machines are available at any point in time) and other variable inputs, whose quantity can be changed in the period. In the second category, with natural boundaries, labor and raw materials.

PROFESSOR: Good. Whether an entry as a fixed or variable depending on the length of the period. The longer the period, all other entries are variable, not fixed. In general, we define two periods: the short and long term.

The short-term than the period in which at least one set of inputs defined economy. As the company are machinery and equipment to the entries difficult to change quickly in the short term usually refers to the period during which companies and institutions are the state fixed mean.

The long term is the period in which all inputs are variable. In the long term it is expected that the company is to make a full adjustment to changes in its environment.

Product by an entry

To determine which production technology, ie, must use whatever combination of inputs, a company it is necessary to define the average product and marginal product of an entry.

The average one entry is the total output by the quantity of inputs are used to produce this amount of production divided. Example: In an eight-hour shift from one machine to produce 800 units of product, the product through the machine 100 units per hour.

The marginal product of an input is the total production by the addition of the last unit of input are kept constant in other inputs. Example: Suppose the machine chocolate bars, then to make the case in hand. With the same machine and ten workers put tablets in case we can produce 1000 cases per hour completed, an average of 100 cases per worker. If we can produce 1090 cases a worker per hour. The marginal product of a worker is 90 cases per hour.

STUDENT: Why is it that the extra workers added that 90 cases of product, while the average was 100 cases per ten workers?

PROFESSOR: Oh, it’s because you are working the infamous law diminishing returns against you! This is perhaps the best known and certainly one of the least understood, the laws of economics

In short, the idea is that if the same be added in increments of a command, the quantities of other inputs is held constant, decrease beyond a certain point increments, which is given by the product. This means that the marginal product will decrease the input. The reasons for this general law are applied in different situations. In our example, we can expect to take the chocolate from the machine on a conveyor belt from which the workers to move it made in the case. How do you put another person on the same assembly line work, the workers will eventually have less space to work efficiently. It is also possible that the 11th. Less educated workers and more efficient than the top ten. Even if you add twelfth workers, it is likely that the marginal product of another person is less than 90 cases per hour, a sort of sequel to be.
DECISION optimal input

Now we are in a position, a very important issue that the optimal combination of inputs to maximize profits answer? In other words, assuming that the company is to produce a certain amount of production, if the combination of the selected inputs to maximize profits? Questions or comments?

STUDENT: Well, obviously, to maximize profits of the enterprise have to minimize the cost of production.

Teacher: Yes, it seems pretty obvious. OK, I’m telling you now that “the company will be charged by the combination of inputs, so that the marginal product of input of one dollar is equal to the marginal product of the dollar used to minimize a different input.”

STUDENTS: It is now apparently not so obvious. Can you explain what that means?

TEACHER: Of course. Going back to our chocolate tablets, for example, that the company has the speed or power the machine consumes more or less per hour and / or change the number of employees in the operation to change the packaging line.

In the practical limits of the machine and space for employees, the company will combine the speed of the machine and the workers, so that the additional cost is for the production of one type is the same when the speed of the machine increases or received an employee.

Part of this article gave a brief introduction to both mainstream economics and Islamic economics. Second, it provides a picture of poverty in the world today and the Islamic view of poverty. Islamic and economic instruments, such as poverty, Zakat, Sadaqah, Qard Hasan, Ganim, fifth, Fay, jizya, mudaraba, Musharaka, the prohibition of interest, the abolition of the spectacle, to reduce the prohibition of speculation and hoarding were briefly mentioned. Influence of the Islamic economic instruments on the marginal propensity to consume, multiplying the price of investment and production costs are fixed.

The books and articles I have mentioned in this article, Dr. Azmi Dr.Sabahuddin Islamic economics, the economic function of the SM Hasanuzzaman an Islamic state (early experience), Towards an understanding of the economic system of Islam, Dr. Ibrahim P and introduction into the economic system Moulavi.MVSaleem written.

Presentation

No one can downplay the importance of the economy is a social science, the production, distribution, trade and consumption of goods and services studies. The importance of the economy led to the emergence of different economic systems in the world and all economic systems say they are looking to the economic well being. Who controls and the failure of the economic system, which require economic justice, prosperity, irradiation of inequality and poverty complete an alternative economic order that can succeed in making a free and hungry in the world without poverty.

Definition of Economics

Social scientists have developed different definitions of the economy. Lionel Robinson definition of the rarity of the economy is the most widely accepted among them. Robinson said “economics is a science which studies human behavior as a relationship between ends and scarce means that alternative uses” is based on this definition, two points, the scarce resources and needs all the time. But the reality is an old myth. The investigation by the UN shows that there are sufficient resources to 20 billion people on Earth, we only have six billion people on Earth who live now. The latter “should never with the ending” is also false that the desire and greed of man is boundless, but the need is countable and verifiable.

Definition of Islamic Economics

As a way of life Islam left no area of ??human life, no direction. Whether individual, spiritual, social, economic, or political Islam provides clear guidelines. Given the economic policies of the Islamic sources, Islamic economists have developed a plethora of definitions. Derivation of any definition of Islamic economics is based on the guide to the basic sources of Islamic Shari’a the Koran and the Hadith.

According to Yusuf Ibrahim, a professor of Islamic Economics, University of Qatar “Islamic economics is a science that studies the management of human behavior to use resources to meet the needs.” This definition is based on the following facts.

1st Resources are sufficient to meet the needs.

2nd But resources must be protected against waste and abuse.

3rd Human behavior, the resources should be controlled by divine commandments.

4th Only legal requirements, needs to build the life on earth be fulfilled.

5th Illegal needs (desires), the destruction of life on Earth are not satisfied, they are endless and never satisfied.

Islamic economic system, an economic regulatory regime was built on some fundamental Islamic philosophy. According to the Quranic teachings real and absolute property of the wealth belongs to the same God the Creator, the Almighty. Quran says: “Allah belongs all that is in heaven and on earth” (2:284) The role of man is seen as a trustee is to administer the trust, wealth, under the direction of beneficial owner is; .. Qur’an God clearly states “and spend only where the trustee has you” (57:7) Thus man has given.

Property packaged and limited.

Another Islamic philosophy is of universal brotherhood and equality of man, the Creator is one and the parents are the same. Therefore, the distinction of race, no caste, creed, race is not suffering at all costs. This concept leads to the people of the cooperation and involvement in all efforts rather than deception, fraud and exploitation of others. Another aspect of Islamic philosophy is the belief in the Day of Judgement after death. In life after the death of the man responsible for his actions on earth. The implication of this conviction is that the economic decisions we should be judged in the world standards set by Allah a.

These are the points, the revolutionary Islamic economics, liberal, capitalist, imperialist, different dominant economic system sharking and communist class struggle, the economic system of the dictatorship of the state. Islam is building a more just world in which the spirit of the eternal divine concepts.
Poverty

Evil of any economy is poverty. The presence of the begging hands in an economy where the economy is back in several decades. Many in the middle of poverty is the challenge of the modern world. Effects of poverty can not be limited to the famine, only leads to poor out of hunger, suffering limited incomes to lack of access to good education, the disabled, a new professional challenge that requires multiple studies over many years. The lack of nutritious food results in the morals of children among the most disadvantaged. Since only limited access to information and knowledge are prevented from market opportunities.

Each country and international organizations like the World Trade Organization, the World Bank and Asian Development Bank’s work to fight the order to the country and the world of cold self-confidence, or. World Bank mission to reduce global poverty and improving living standards is described. General Council of the United Nations has declared 17 October the International Day for the Eradication of Poverty. It shows how seriously they took poverty as a problem

But, he wondered, that 6.1 billion of the world population find over 1 billion on food in less than 1 dollar per day and nearly 3 billion on less than $ 2 per day. They can be divided caused only 74% of total income in the world of 20% of the world’s elite class. It is reassuring you that there are countries whose national income is less than 800 $ and the morals of children under five years is approximately 26%. There is concern that 110 million children of school age not attending school and 60 percent of them are girls.
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Poverty and Islamic economy

Fixed below the poverty line (BPL) in the system of Islamic economics, on the basis of ownership of Nisab, this limit a right to payment of zakat on wealth or who is responsible for the payment of Zakat on Nisab. This abundance is less Nisab addressed the Zakat and they are treated as poor. Thus, in the Islamic economy, the size of the private sector under BPL are great. Famine and the inaccessibility of food, shelter, clothing and education is not in an Islamic economy, human suffering will Falah, meaning the well-being. It does not support economic instrument, leads to the disenfranchisement. As poverty in developing countries due to various causes in order to destroy these causes is the most important.

Limited income, the unequal distribution of income and wealth, the misallocation of resources, regional disparities, unemployment, social injustice, and a decline in investment … etc. are only some of the obstacles on the path to independence and well-being. Islam regards the satisfaction of basic needs of every member of society is the economic, moral and religious duty of the rule. List of goods expanded food, traditional clothing, and shelter for seasonal clothing, personal care attendants for disabled people, and the expenses for the marriage of poor and expenditure for the whole family of the poor, the intensified by scholars from time to time, the time , to extend time for the welfare of citizens list. Islamic economic system performs a variety of instruments, led by God to end the poverty and
Less poverty in the world.

Islamic economic tools for poverty eradication

It is recommended that Muslim citizens to practice in an Islamic community as part of the belief that certain things in their lives, some of which are compulsory and the rest is optional. The practice of these have far reaching effects on the economic opportunities of God. Non-citizen Muslims also needed to certain fees, the economic, to pay as part of their citizenship in the Islamic country. Mandatory duties of citizens and agreements would have on the Islamic state and the violation of any party does not suffer, the Islamic state. In addition to these functions, there are other things in the Islamic state, no nation has to meet similar to the well-being of citizens. Both positive and negative measures recommended Islam to destroy the reason for poverty.

Positive

There are many Islamic rules and commandments, certain things that have an immense impact on the economies of justice, prosperity and growth. Important among them God’s commandments and their influence on the economy are informed in the following.

Zakat

Zakat is an annual obligation of the rich to the poor Muslims, and this is the part of the have-nots in the property and assets of the rich. Quran praises “the prayer and pay the poor their due (Zakat) and obey the Messenger.” Technically, we can call it spiritual as taxes. There are growing on these forms of wealth, ability, the value will be imposed or to produce any other way other is that custody for the whole year and have a certain minimum value called “Nisab.” Koran said the eight specific header for the distribution of zakat.
Because of the divine spirit in the execution of the Zakat, the chances are less to escape. The imposition of zakat on wealth slows urges owners to productive and profitable use of idle wealth, the wealth of the economy and rising again of Zakat.

Donate

Sadaqah is a voluntary instrument industry. No limit and criteria for contributions to the needy. It can distract, apart from the eight heads for the distribution of zakat known to anyone in need. and it will reinforce the economic impact resulting from the zakat.

Qard hasan

It is intended to cover an array of interest-free loans for the needy or non-productive expenditures such as hospitalization, the cost of housing and education expenses, etc., no profit. It is therefore not in a position to charge on any material benefits, as a share of profits, qurd Hasan. They are made with the part of the goodness of people available. In an Islamic economy individuals and institutions such as Islamic banks offer such loans in expectation of reward from Allah. Availability Qard Hasan reduced financing costs as interest rates, private.

Sharing profits and losses

Islam-shared profits and losses instesd as the tool of interest in commercial contracts. The motivation behind this is that cooperation between nations. In parts are different types of financing such as mudaraba (profit and loss sharing) and Musharaka (participation) … etc.
Mudaraba is the agreement between the owners of capital and the entrepreneur in addition to the profit of the company and in case of loss of equity holders is reduced and losing the time and effort of the entrepreneur. Musharaka is sharing agreement, the profit and loss statement, in which all participants are involved in corporate governance. Both mudaraba Musharaka and help people, not enough capital to enter business, production, and have committed their share of the country’s prosperity and profits for themselves.

Ganim (war booty), Khums (fifth) and Fay

Ganim are the property of the Muslims among the enemy. Four-fifths of Ganim is divided between the army and fight a fifth (Khums) Ganim move all the state, which is reserved for special beneficiaries mentioned in the Koran to be financed. Fay is the property receives from the enemy without a real fight. This source of revenue for the state is generalized for the common good of the entire population and the public welfare.

Kharaj (taxes)

Property tax, a source of revenue for the state imposed the levy on the products in the country. This is the rent for the use of land values. Kharaj rate and collection method can be explained by the state from time to time, as there is no direction from the Koran and the Tradition of the Prophet in this regard.

Jizya (poll)

Jizya (poll tax) to non-Muslim citizens of Islamic countries imposed to safeguard their wealth, their lives and property from harm. It helps them develop their skills, talent to bring health, wealth and property for the prosperity of the country

Waqf (foundation)

Waqf (foundation) is a regular source of income, the reserved and dedicated support to the Islamic finance charitable and welfare
State ownership of uncultivated land:
Any device that economic productivity is hampered harmful to the thriving economy. In Islamic Shariah, if a field remained fallow for three consecutive years leading into the possession of this land to the current owner, others who are willing to grow crops and to move. Prophet (peace be upon him) said: “.. The original property rights in land is God and the prophets and then your later But everyone who buys revives the dead land title to them,” This is a different institution iqta, stimulate the blood circulation and revenue through the transfer of the desert / death, someone in exchange for one or ushr khraj.

Combined participation of natural resources:

Individual ownership of natural resources such as fire, water, pastures and salt to be restricted by the Islamic Sharia. The people have the ownership of natural resources, combine them accessible to everyone. This rule allows each to the benefit derived from natural and ensure that nobody in the vicinity of the natural resources that is easily accessible, without working hard, .. List of natural properties, in addition to the above products can be expanded and more goods in time to time. Prophet (peace be upon him) said: “People are co-owners in the water, grazing and fire.”
There are other sources of revenue as the property of the deceased without legal heirs, lost and found, with no additional candidates and taxes.

Negative measures

There are some prohibitions of God, which have an impact on the prosperity of the economies and well-being of all people in the country.
Prohibition of interest
Interests, regardless of form, was despised by Allah and His Messenger. Quran says: “Allah has permitted trade and forbidden riba” has (interest). Islam is not compatible with the interest, but profit and loss sharing. All financial transactions of Islamic economics to be free of interest. But the lack of interest in Islamic economics provides no impediment to grow wealth, but wealth.

Prohibition of speculative instruments

The instruments that have no use for the real economy, such as futures and options are not allowed in Islamic economics. Instruments such as stock market day trading is marginal trade is prohibited, either. The absence of these instruments in the economy reduces the speculation is bad for the economy as a whole.
Follow

The implementation of the guidelines that we discussed above Sharia in an economy with many positive fruits that result in the state is free to make use of all forms of poverty.
Increased redistribution of income and wealth-if people carry on their religious duties such as zakat, Giving waqf, inheritance and Zakat fithr kaffarath etc. .. It leads to the rich flow of wealth and money to poor ones. Thus, the concentration and accumulation of wealth in few hands down. Poor and needy to spend about eighty percent of their income to meet their basic needs. Economically marginal propensity to consume (MPC) of the poor is greater than medium and high class. Much of everything that comes to hand, will go on to the bad economic situation for the consumption of commodities, they lead to greater demand for raw materials and it is apparent from the increased production of goods basis. It is difficult to determine the consumption of luxury and completely limit production by the law and force. But the increase in the rate of redistribution of wealth and income increase the demand for basic goods and to reduce the demand for luxury goods. Automatically reduces the use of resources for the production of luxury. Therefore, the use of natural resources for the production of basic goods and for the benefit of the common good
This redistribution of wealth to the poor increased their income from the availability of a good education and nutritious foods. Improve the knowledge and skills to help the poor get good jobs and win. This is the whole family, poverty and dependence raises from the heights. In return, the increase in income over a certain limit, they will be able to zakat and other donations to benefit the advantage of the have-nots. Increase to decrease with redistribution, the gap between rich and poor and bring economic justice for all citizens.

Increase the MPC as the poor results in the redistribution of income multiplier effect in the economy more than the gain of fuels in total income of the economy that helping the poor quarters of the population, its per capita income and the amount of the levy life.

According to Professor Keynes, investment depends on two variables that are currently rare interest and the marginal efficiency of capital or the expected rate of profit. The investment should be made when the expected profit before interest. Due to lack of interest in an Islamic economy, only the size of the expected rate of profit will be the determinant of the profit on investment.

Motivation and the theory of speculative money in the liquidity of money have no place in an interest-free economy, reducing investment costs. But the presence of profit rates should translate to investments, increase in low expected rate of profit in the amount of principle and to avoid a deterioration of capital through Zakat. The increased investment to increase production, employment, wages, and the entire national income of the economy. It flows from rich to the poor and increasing their economic status.

Fisher quantity theory is that the amount of money affects the price and value for money. This means that an increase in the money supply increased in proportion to the price in economics, but the output is not increased. But in the case of Islamic economics money should not be made without increasing production. To central banks and commercial banks in the Islamic state in the money supply by increasing investment contracts on the basis of sharing profits and losses. Thus, any flow of money into the economy over the results of the output growth without proportional increase in prices. It is useful to the poor for things they need at a reasonable price

Completion

To eliminate out of poverty in the Islamic economics is simple. Belief in the Oneness of God (Tawheed), that the performance of Zakat and the sharing of profits and losses, motivated, and the avoidance of interest and extravagance. Redistribution and increased productivity are the result of these instruments, which can ultimately achieve poverty reduction.

Headlines read, “We are now in a technical recession.” What does this mean? A recession is defined as an economic downturn. The exact definition is two consecutive quarters of negative GDP decline. So today, “Today we are indeed in a recession, not that it be a surprise for everyone.

The GDP is really a general measure of production from one country of goods and services. The data on personal consumption expenditures in the British government to collect property, and income, who received the relevant sectors of the economy such as agriculture, banking, mining and manufacturing, to name a few.

It is simply an attempt to the incomes of the company over a period of time, ie to measure gross domestic product. “Brute” The word as physical wear and tear on capital equipment as is used at the factory, all office equipment, etc. not included.

The gross national product (GNP) is somewhat different in that it measures of foreign income, which also added in GDP.

Is it useful? Well, it depends on what you use it. If our last quarter of growth (January to April) had, we were in a good economy that we invest? Hardly.

As anyone who has information about what you make of it. The last quarter of 2008 showed the largest decline by a quarter since 1980. (1)

It is a measure of what you should do, or is it simply a report that your team is empty, and dust in the distance is a horse. The latter is my opinion.

I do not know the story, and the GDP is simply a mirror image of what happened and where we are, like where we are against it. A large proportion of GDP in Britain comes from the banking and financial services (31%), 18.2% of the admin and public education, and 13% in manufacturing.

It is easy to see what’s happening in the banking industry and why the UK GDP was beaten. In addition, a global economic slowdown and the production is disrupted. But that is a reflection of where we are, that’s the way to look behind you or on your lap.

In the United States, for example, there is a belief that GDP is misleading in terms of well-being, and they designed a Genuine Progress Indicator (GPI). This indicator examines whether the production of goods and services have a positive impact on the wellbeing of the population. For expenses such as law enforcement and pollution cleanup to be judged from the total increase in spending, whether it subtracted a significant improvement or decline of social protection.

It is interesting to separate the graph of GDP in 1965 with a GDP of a relatively constant increase in the GPI and fall during this period.

GDP ignores the drawbacks of life on foreign loans. So we all have as a nation by our government to borrow abroad, it has not been priced Decide where we are is a pointless argument. Decide where to go is another.

There are simple steps to see if they look like decisions. Do we value the sound of the price indices at home? They are also useful as a spade, if you try to knit with spaghetti. They all stressed the rise in house prices of at least one year after I pointed out that in building completions fell. For advice, talk to your mortgage broker independent mortgage.

Consumption spending and the world is critical because it is a sign of trust and you can often see that the pre-walk around the shops – an investment of your time than reading on GDP, as you well before the information .

Source (1) BBC

About Peter McGahan and financial planning in the world:
Peter McGahan is managing director of financial planning in the world – Award winning independent financial adviser FT. Peter writes for numerous publications and local and national news, it is generally repected as an expert in personal finances.

Financial planning in the world specializing in professional one-on-one counseling in the areas of mortgage, corporate finance, investment, pension and retirement planning and inheritance tax.
Peter McGahan is an Independent Financial Adviser and Executive Director of Worldwide Financial Planning Ltd who are licensed and regulated by the Financial Services Authority. “The FSA does not regulate credit cards, will writing and some forms of mortgage and inheritance tax planning.
The information is for guidance only and should be specific advice before acting on any suggestions are taken note of.
The above represents the personal opinions of Peter McGahan.
All information is for our understanding of current tax practices based change.
The value of shares and investments may rise as well.

With these two aspects in the hands of producers and consumers are in many forms of contracts. There are two types of markets: product markets and factor markets. Product markets are most frequently observed, in which individuals purchase products from companies or business units. Here is the theory of consumers and producers on the scene. Factor markets are usually the opposite, buying the services from private companies. These services can not the definition of “overweight”, but lead the course of the relationship between employer and employee. One factor that market, where companies or companies that borrow money for investment and labor, and sellers are people who work for companies offer, and usually save their money in banks.

In these categories, many sub-branch markets. Competitive markers are the most common, with many vendors providing similar products to many buyers. Competitive companies a profit on the relationship between net and gross income, and hang at a cheaper price than competitors offer. This type of market is seen primarily with a capitalist economy. Monopoly for the competition are similar, but differ on the type of product. Monopolistic companies to offer various products all have a common service. A monopolist profits benefit by a product which can vary the same basic service as another business, but in small details, the different types of buyers design. The automotive industry is proving scooters, motorcycles, automobiles and other transportation is an example.

Oligopolistic markets are less common but still prevalent in the modern economy. A company is an oligopoly with few competitors, and they predict that sales outside of the “game” their opponents, analyzing their decisions and the outcome. With an analysis of the opponents is the basis of the oligopoly, when the income is based on providing a product that was released more features than any other product, at the same time. The wireless industry is a perfect example of the oligopolistic market.

A monopoly market is a very rare, mainly due to general production in the capitalist economy and state regulations. In a socialist or communist, but a monopoly is not unusual. Without government regulation, some companies have entered fully from a particular product, then all parts of it have. This allows the company to control the price alone, without competition or reason to regulate prices. With a gas company, for example, would be a monopoly because the company is not competitive regulatory gas prices.

There are also markets that are in these markets in general, if the buyer has control over prices, rather than the vendor and its competitors. These two markets are known as monopsony and oligopsony. A monopsony is a monopoly, except that there are many vendors and buyers. This allows the buyer the price of each company by checking them against each other and provides the most reasonable price. After buying the government monopsony health because the government would provide the company with the company to give any cost greatly. Oligopsony have a few customers for many sellers. The tobacco industry is regulated by oligopsony, since few buyers are large tobacco farmers against each other down each award. Normally, few buyers analyze the seller, and cumulatively a strategic system of regulation to control their budget and the net income.

As you can see, the overall impact is on prices in a market, the differentiation of supply and demand. Since the supply curve does not change in demand, the impact increases in proportion, the price varies dramatically with fewer vendors. Opposite, as the number of buyers decreases, the impact of price changes radically again to meet the buyer, and maximize profits for a business, while generating net profits.

Another important aspect of microeconomics is the method of economic measure. When measuring the effectiveness of an economic system, many variables come into play literal variables submitted as stocks and flows. A particular item is not a respectful relationship with both. Stock size is usually measured by the need. Things such as inventory, pricing, availability and wealth are usually measured by necessity or by volume. The stock variables are critical in an economy because they have something customized for the consumer, and also offer a rich product.

The flow variables are more frequently seen with certain aspects of the income. The flow variables of time units, such as income per year, production per month. The flows for the regulation of stocks, as well as society in general, to prevail by a solid foundation in some social aspects of dealing with companies and as a company supply to regulate. This helps provide consumers with a reasonable limit to be sure, continued availability, while providing an enterprise of a marker of how much they can produce.

The analysis is one of the most important parts of an economic system. The economic analysis covers almost every part of a company or a budding conglomerate globally and for most companies is the main result of the success and regularly. One of the strongest on the analysis is the inflation of the dollar. The ability to calculate the inflation of certain products can help, competition and future expenditures, and one based on how much to spend on business needs and how much to save.

Inflation is generally measured using the Consumer Price Index or CPI. The CPI provides a system as a specific topic raised at a time, based on using the basic unit of time to calculate. With a system of weighting of the CPI is calculated each year to see through the economic analysts, the current inflation rate, which a weak outlook in the future editions, whether useful or not. With the CPI, we can also derive nominal and real price of an item.

Nominal price is almost the face value of an item. It is customary to pay total price of an item in advance. Nominal is the price the consumer sees, be added to the inflation already. The nominal price is what generates profits for the company is derived. When inflation by calculating the difference between the values ??of the CPI for the basic unit of time, when the product arrived, is ruled out against the current time unit, is the price to see. The real price shows the increase in real prices, or decrease in a product, as it began, without inflation of the dollar to be sold. The real price of an item is the key to the real value of the dollar in an economic system that will see a series of future investments is determined, and the values ??of shares and so on. The true value of fuel and changes of an economic system and its businesses grow and develop.

There are two types of analysis on the CPI in an economic system is based. Positive analysis examines the relationship between cause and effect in real situations. Positive analysis focuses largely explain why the things from a social perspective and predict what might happen next. Normative analysis is the analysis of their relevance to society is based, and how things are based out of need and support for the modern society and economy. Use sport is a good way to describe both. With LeBron James, the positive analysis and normative view would come in. The analysis suggests that positive LeBron James made $ 100,000,000 annually, because the market value is based on the amount of fans / viewers, he did. The view of normative analysis would explain that his income is too high, because he does not play an important role in modern society, while the science itself, a greater need for the grade level would have because they have a genuine and scientific explanation for some subjects, what a useful aid for the company. The scientists were able to play a greater role in society, normative, while LeBron Positive exceed the company.

Unfortunately, when helping to America to participate in these opportunities come, U.S. politicians have once again proven to be a lagging indicator. To understand the challenge and opportunity, the policy should consider the lessons during the information technology (IT) revolution of the 20th Century learning.

Two important lessons emerged from the revolution: first, we were told that federal support for research – plays a crucial role in creating new markets – basic and applied. Commercialization of federally funded research (such as ARPANET, the forerunner of the Internet) has created a global computer market and triggered a huge demand for products, services and know-how in the digital age.

The second important finding is that our system of education and human resource development has failed an adequate supply of workers in order to create demand for new technologies created the game. The “talent deficit” National Top IT companies need highly skilled foreigners to rent in the 1990s. Import talent increasingly accelerated incentives for foreign students and STEM, the movement of high-tech companies outside the United States.

We must not repeat that mistake.

In addition to creating a predictable regulatory framework for market growth in low-carbon products and services to the public and private sector to take special measures to get the American worker – and to continuously improve – the skills necessary to compete in order. Rationalization of the national workforce investment is a key objective, at present there is a failure. In fact, adoption of federal legislation on the development of human resources in 1998 – the Workforce Investment Act (WIA) – was never allowed back. Simplify the system requires an understanding of future needs and programs for workers cut unnecessary or ineffective.

Announced 1) First, as part of the administration recently, the Better Buildings Initiative, the Presidential Council on Employment and Competitiveness (CCPC) in in cooperation with the Bureau of Labor Statistics, immediately undertake a study to quantify the skills, qualifications and certifications for use low carbon economy requires. This may indicate that the Carbon Disclosure Project (CDP), which is a collection of information about how the world’s largest companies are created to model the fight against climate change.

The quantification of the carbon data from the labor market can move the policy makers better target resources at all levels for personal and local labor market needs. Instead of assumption underlying the current system of personal investment goals, we need robust, data-driven processes to identify gaps in skills and training to identify the employee.

2) Second, Congress should direct the National Academy of Sciences at a 12-month study carried out to assess the ability of our education system with the challenge of low-carbon economy needs. We need a clear and detailed understanding of the needs and the training of students and teachers. Wave are not complete calls more math and science enough. Chairs of Governors, colleges and universities, school boards, principals and teachers need intelligence to action decisions of curriculum and training.

Workforce development is the catalyst for a virtuous cycle of economic growth. Talent drives innovation, which in turn will promote the growth, wealth creation and employment. Jobs in low-carbon industries are particularly rich in potential. Unlike jobs in the IT industry, many jobs in low-carbon industry (such as auditors of energy and retrofitters CVC) are by definition local, and require only short-term retraining. As a result of the taxpayers’ money for the development of the hand can be better used, the company faster access to staff with the necessary skills and workers spend less time unemployed. But all this depends on the understanding of the challenges we face, and the clarity of vision requires detailed data on the labor market.

Climate change is accelerating, but also the global transition to a low carbon economy. While we were slow to act to date, there is a clear opportunity for the leadership of the United States if we are taking our employees the skills to it.