ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Economic institutions provide basic physical subsistence for society and meet needs for food, shelter, clothing and other necessities of life. These institutions include production agriculture and industry and the distribution, exchange and consumption of commodities, goods and services necessary for human survival.

Detailed explanation-2: -By narrowing the definition to economic institutions, those institutions that perform economic functions are covered; of these, three sets can be identified: establishing and protecting property rights; facilitating transactions; and, permitting economic co-operation and organisation.

Detailed explanation-3: -Let us see what the basic institutions of the market economy are. We may subdivide them for convenience of discussion into (1) private property, (2) free markets, (3) competition, (4) division and combination of labor, and (5) social cooperation.

Detailed explanation-4: -When economists use this term, they mean: property rights, honest government, political stability, dependable legal system, and competitive and open markets.

Detailed explanation-5: -Economic institutions are responsible for organizing the production, exchange, distribution and consumption of goods and services.