Differences Between Micro And Macro Economics Economics Essay

Differences Between Micro And Macro Economics Economics Essay Each NCC Education assessed assignment submitted by you must have this statement attached to the assignment as the cover page or it will not be accepted for marking. Please ensure that this statement is either firmly attached to the cover of the assignment or electronically inserted into the front of the assignment. Student declaration I have read and understood NCC Educations Policy on Academic Dishonesty and Plagiarism. I can confirm the following details: Student ID/Registration number: 4-16-03-09-010 Name: Mahabuba Rahman Centre Name: Daffodil Institute of IT Module Name: Economics Module Leader: Mr. Abdullah-Hil-Muntakim Number of words: I confirm that this is my own work and that I have not plagiarized any part of it. I have also noted the assessment criteria and pass mark for assignments. Due Date: 18th February, 2010 Students Signature: Mahabuba Rahman Date of Submission: 17th February, 2010 Acknowledgement At last, an arduous journey has come to an end. It was a great experience to make an assignment on economics. For the successful completion of the different areas in the process of writing the assignment, many people extended their helping hands and their practical thoughts as well. Without all those helps from different fields, it would not be possible to ease the entire process and make smooth works. In the first place, I want to express my heartiest gratitude to our respected teacher and mentor, Mr. Abdullah-Hil-Muntakim, for guiding us with necessary advices, whenever needed. This assignment is assigned by NCC Education UK. I would also like to thank NCC Education UK for providing me such an enjoyable assignment like this. Mahabuba Rahman Table of Content Task1à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 01 to 05 Task2à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 06 to 14 Task3à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 15 to 17 Task4à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 18 to 21 Task5à ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦. 22 to 24 References Bibliographyà ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦Ãƒ ¢Ã¢â€š ¬Ã‚ ¦ à ¢Ã¢â€š ¬Ã‚ ¦.à ¢Ã¢â€š ¬Ã‚ ¦ 25 Task-1 What is Economics? The Economists Dictionary of Economics defines economics as The study of the production, distribution and consumption of wealth in human society. Another definition of the subject comes from the economist Lionel Robbins, who said in 1935 that  [1]   Economics is a social science that studies human behavior as a relationship between ends and scarce means which have alternative uses. That is, economics is the study of the trade-offs involved when choosing between alternate sets of decisions. According to Adam Smith, Economics is a study of an enquiry into the nature and causes of wealth of nations. J. S. Mills says, Economics is a study of the practical science of the production and distribution of wealth Generally, Economics is a study of how people allocate their limited resources such as land, labor and capital to provide for their unlimited wants.  [2]   The basic economic problem is about scarcity and choice since there are only a limited amount of resources available to produce the unlimited amount of goods and services we desire. In an economy, people have unlimited desire for goods and services i.e. unlimited wants, but the resources in the world are limited and so we cannot satisfy all our wants and are forced to choose as to which goods to produce. Therefore, scarcity and choice or limited resources and unlimited wants sum up the basic economic problem. We can summarize this idea into the following figure:  [3]   Limited Resources Can be used to produce Limited amount of goods services. Which then satisfy Unlimited amount of people wants FIG: Limited Resources and Unlimited wants As we are faced with the problem of scarcity, there are 3 important economic decisions to be considered. What goods and services to be produced and what quantity i.e. how much to be produced? How or by what method goods and services should be produced? For who are goods and services to be produced i.e. who are to enjoy the goods and services produced? Opportunity Cost: Opportunity cost is the cost we pay when we give up something to get something else. There can be many alternatives that we give up to get something else, but the opportunity cost of a decision is the most desirable alternative we give up to get what we want  [4]  . Opportunity cost of satisfying a want is the next best alternative that has to be forgone (i.e. the cost of giving up something in order to obtain something else). As for example, a person has $5 and he can spend on chocolate or chewing gum or a combination of both. Price of a bar of chocolate = $0.50 Price of a bar of chewing gum =$0.20 Figure 1 Opportunity Cost There are 6 attainable combinations available to him using all his money. Assuming that he is consuming 6 bars of chocolate and 10 bars of chewing gum, the opportunity cost of the 8th bar of chocolate is what he must give up in order to get that 8th bar, which in this case is 5 bars of chewing gum. The line on the above diagram shows a constant opportunity cost of consuming 2 additional bars of chocolate is 5 bars of chewing gum. Opportunity Cost is represented by the slope of that line.  [5]   In simple terms, opportunity cost of an action A is the next best alternative action B that you give up. For example, if you spend one hour in reading then you are actually giving up one hour of fishing which is say, your next best alternative use of that one hour.  [6]   Reading for an hour means giving up So opportunity cost of reading is fishing. Differences between Micro and Macro Economics Macro- and microeconomics, and their wide array of underlying concepts,  have been the subject of a great deal of writings. The field of study is vast; here is a brief summary of what each covers: a) .Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics  focuses on  supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize its production and capacity so  it could lower  prices and better compete in its industry.  [7]   On the other hand,  Macroeconomics is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena, such as  Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nations  capital account or how GDP would be affected by unemployment rate. b) Microeconomics deals with the economics of the firm, examples are Consumers Behavior and Production Theory.  [8]   Macroeconomics deals with the aggregates, examples are National Income Accounts and Inflation. c) Microeconomics (small economics), which examines the economic behavior of agents (including individuals and firms) Microeconomics looks at interactions through individual markets, given scarcity and government regulation. A given market might be for a product, say fresh corn, or the services of a factor of production. The theory considers aggregates of quantity demanded by buyers and quantity supplied by sellers at each possible price per unit. It weaves these together to describe how the market may reach equilibrium as to price and quantity or respond to market changes over time.  [9]   Macroeconomics (big economics), addressing issues of unemployment, inflation, monetary and fiscal policy for an entire economy. Macroeconomics examines the economy as a whole to explain broad aggregates and their interactions top down, that is, using a simplified form of general-equilibrium theory. Such aggregates include national income and output, the unemployment rate, and price inflation and sub aggregates like total consumption and investment spending and their components. It also studies effects of monetary policy and fiscal policy. TASK-02 Demand Curve In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity, and the amount of it that consumers are willing and able to purchase at that given price. It is a graphic representation of a demand schedule.  [10]   The demand curve is a graphical representation of the data in the demand schedule. It slopes downwards from left to right indicating that the quantity demanded increases as the price falls.  [11]   The table below is the demand schedule that lists the quantity of a commodity that would be demanded at various price levels with a given income. It shows the relationship between quantity, demanded and price. Price Quantity Demanded 50 0 40 1 30 2 20 3 10 4 Quantity Price 50 40 30 20 10 Fig: Individual demand curve 1 2 3 4 5 Demand curves are used to estimate behaviors in competitive markets, and are often combined with supply curves to estimate the equilibrium price (the price at which sellers together are willing to sell the same amount as buyers together are willing to buy, also known as market clearing price) and the equilibrium quantity (the amount of that good or service that will be produced and bought without surplus/excess supply or shortage/excess demand) of that market An example of a demand curve In the diagram, the line labeled D shows a plot of that demand curve, say for blue jean prices and number of pairs demanded. Prices are P (in $) and quantity is Q (in number of product units) on this diagram. At a price of $75 (vertical axis), two pairs are demanded (Q on horizontal axis). As the price P on vertical axis is lowered from $75 to $50, the quantity demanded Q is increased from two pairs to three pairs of blue jeans.  [12]   Market Demand Curve:  [13]   The market demand curve is the curve related to the demand of the commodity demanded by the group of people to that different price. How a market demand curve is derived: The market demand curve is the horizontal summation of individual demand curves. Individual demand is the key initiator of the production process. It is independent of all factors other than the preference curve, prices and income constraint. The law of demand: lower the price, greater amount demanded, i.e. demand curve is negatively sloped Fig: Market Demand Curve Market Demand Schedule and Curve:  [14]   Market demand is the total demand of all the consumers for particular goods. It can also be derived by the lateral summation of the consumers demand curves. Price($) Market Demanded Buyer A Buyer B 80 0 2 2 70 0 3 3 60 0 4 4 50 1 5 6 40 2 6 8 30 3 7 10 20 4 8 12 10 5 9 14 The following demand curve is drawn on the basis of the data for buyer A, given in the above table. P 80 0 70 60 50 40 30 20 10 5 0 1 2 3 4 5 6 Q Fig: As Demand Curve The following demand curve is drawn on the basis of the data for buyer B, given in the above table. In this graph the price values are set up in the X-axis and the quantity values are set up along Y-axis. P 2 80 70 60 50 40 30 20 10 9 0 1 2 3 4 5 6 7 8 9 Q Fig: Bs Demand Curve Following is the Fig. of a market Demand Curve:  [15]   P 80 (0+2) =2 70 60 50 40 30 20 10 (5+9) =14 0 1 2 3 4 5 6 7 8 9 10 12 14 Q Fig: Market Demand Curve The market demand curve is a graph drawn by the combination of the above demand curves. The market demand value is calculated from the demand of buyer A and buyer B. The market demand values are aggregated values for the values of buyer A and buyer B. We have calculated the values in the above table. In this graph the price values are set up along X-axis and the quantity values are set up along Y-axis. A Firms Output Decision in the short-run: The short run is a period of time for which two conditions hold: The firm is operating under a fixed scale (fixed factor) of production, and Firms can neither enter nor exit an industry. In the short run, all firms have costs that they must bear regardless of their output. These kinds of costs are called fixed costs. Costs in the Short Run:  [16]   Fixed cost is any cost that does not depend on the firms level of output. These costs are incurred even if the firm is producing nothing. Variable cost is a cost that depends on the level of production chosen. TC= TFC+ TVC Total Cost = Total Fixed Cost + Total Variable Cost. 250 1,000 4 200 1,000 5 333 1,000 3 (2) TFC (3) AFC (TFC/q) 500 1,000 2 1,000 1,000 1 $ â‚ ¬Ã‚ ­Ã¢â€š ¬Ã‚ ­ â‚ ¬Ã‚ ¤Ã¢â€š ¬Ã‚ ±Ã¢â€š ¬Ã‚ ¬Ã¢â€š ¬Ã‚ °Ã¢â€š ¬Ã‚ °Ã¢â€š ¬Ã‚ ° 0 (1) q AFC falls as output rises; a phenomenon sometimes called spreading overhead  [17]   In the above figure, when the firms production is 0 it has to occur $1000 as a fixed cost. And at the production level of 3 or 5 units, the firm has to occur the same amount of fixed cost. So with increase in the number of production units the average fixed cost is reduced. Output Decisions: In the short run, a competitive firm faces a demand curve that is simply a horizontal line at the market equilibrium price.  [18]   A Firms Output Decision in the long-run: Firms expand in the long-run when increasing returns to scale are available.  [19]   Output Decisions: In a decreasing cost industry, costs decline as a result of industry expansion, and the LRIS is downward-sloping.  [20]   In an increasing cost industry, costs rise as a result of industry expansion, and the LRIS is upward-sloping.  [21]   TASK-3 How an equilibrium price and equilibrium  quantity is achieved? We often show the market equilibrium through a supply and demand diagram shown below. This figure is a combination of the supply curve and the demand curve. Combining two graphs is possible because they are drawn with exactly the same units on each axis. We find the market equilibrium by looking for the price at which quantity demanded equals quantity supplied. The market equilibrium price comes at the intersection of the supply and demand curve, at the intersecting point. At a particular price, at the intersecting point, firms willingly supply what consumers willingly demanded. When the price is too low, less the price of the intersecting point, quantity demanded exceeds quantity supplied.  [22]   Figure 1: Market Equilibrium Comes at the Intersection of Supply and Demand Curves A competitive market is in equilibrium if, at the current market price, the number of units that consumers wish to buy equals the number of units producers wished to sell. In other words, market equilibrium occurs where quantity demanded equals quantity supplied. At the equilibrium price, P*, the equilibrium quantity is Qd=Qs=Q*, where Qd is the quantity demanded and Qs is the quantity supplied. The asterisk indicates equilibrium. In a competitive market, this equilibrium is found at the intersection of the supply and demand curves. There are no storage or surpluses at the equilibrium price. The effects of excess supply on market equilibrium: Market equilibrium is the situation, where at a certain price level, the quantity supplied and the quantity demanded of a particular commodity are equal. Thus, the market can clear, with no excess supply or demand, and there is no tendency to change in either price or quantity. The equilibrium price and quantity will be changed if there is a shift in either or both of the supply or demand curve. Shifts in the supply and demand curves are caused by changes in conditions behind supply and demand not price changes. An increase or decrease in supply will also affect the equilibrium position. An increase in supply shifts the supply curve to the right, thus lowering equilibrium price while raising equilibrium quantity. A decrease in supply, which shifts the supply curve to the left, however, raises equilibrium price and lowers equilibrium quantity. In Figure 2, the quantity supplied at price 0P1 (0Q2) exceeds the quantity demanded. Thus, we have a situation of excess supply or a glut in the market. In order to remove excess supply, sellers will offer to sell at a lower price. The fall in the price results in an expansion of demand, and a contraction in supply (movement along the curves towards the equilibrium point). This will continue to occur as long as there is excess supply, until we reach the intersection of supply and demand, where at price 0Pe, the market clears, that is, the quantity supplied and demanded is equal.  [23]   Figure 1: Excess supply situation The effects of  Ã‚   excess  demand on market equilibrium: Diagrammatically, market equilibrium occurs where the demand and supply curves intersect, at the point where the quantity demanded is exactly equal to the quantity demanded. Let us first consider the case where there is excess demand, where the current price is below that of equilibrium, as shown in Figure 2:  [24]   Figure 2: Excess demand situation Figure 2 reveals that at price 0P1, the quantity demanded (0Q2) exceeds the quantity supplied (0Q1). Competition among buyers for the limited quantity of goods available means that consumers will start bidding up the price. The rise in the price results in an expansion in supply and a contraction in demand (movement along the curves towards the equilibrium point). This will continue to occur as long as there is excess demand. Eventually, we will reach the intersection of the supply and demand curves, where at price 0Pe, the quantity supplied 0Qe exactly equals the quantity demanded by consumers. In conclusion, the market forces of supply and demand interact to bring about the equilibrium price, clearing the market of excess demand or supply. In this way, it is said that the market mechanism achieves consistency between the plans and outcomes for consumers and producers without explicit coordination. Task-4 Perfect Competition: In neoclassical economics and microeconomics, perfect competition describes a market in which there are many small firms, all producing homogeneous goods. In the short term, such markets are productively inefficient as output will not occur where marginal cost is equal to average cost, but allocatively efficient, as output under perfect competition will always occur where marginal cost is equal to marginal revenue, and therefore where marginal cost equals average revenue. However, in the long term, such markets are both allocatively and productively efficient. In general a perfectly competitive market is characterized by the fact that no single firm has influence over the price of the product it sells. Because the conditions for perfect competition are very strict, there are few perfectly competitive markets.  [25]   A perfectly competitive market may have several distinguishing characteristics, including: Infinite Buyers/Infinite Sellers Infinite consumers with the willingness and ability to buy the product at a certain price, Infinite producers with the willingness and ability to supply the product at a certain price. Zero Entry/Exit Barriers It is relatively easy to enter or exit as a business in a perfectly competitive market. Perfect Information Prices and quality of products are assumed to be known to all consumers and producers Transactions are Costless Buyers and sellers incur no costs in making an exchange. Firms Aim to Maximize Profits Firms aim to sell where marginal costs meet marginal revenue, where they generate the most profit. Homogeneous Products The characteristics of any given market good or service do not vary across suppliers Characteristics of Perfect Competition:  [26]   Large number of sellers. Only homogeneous products are for sale. Firms are allowed to enter and exit freely. Perfect mobility of factors. Perfect knowledge of all market situations. Absents of transport cost. The Fig of Perfect Competition is given below:  [27]   Oligopoly: In economics, an oligopoly is a market form in which a market or industry is dominated by a small number of sellers (oligopolists). The word is derived, by analogy with monopoly, from the Greek oligoi few and poleein to sell. Because there are few sellers, each oligopolistic is likely to be aware of the actions of the others. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolistic needs to be taken into account as a likely response of the other market participants.  [28]   This causes oligopolistic markets and industries to be a high risk for collusion.  [29]   Oligopoly is a common market form. As a quantitative description of oligopoly, the four-firm concentration ratio is often utilized. This measure expresses the market share of the four largest firms in an industry as a percentage.  [30]   In short, Oligopoly is a situation in which a particular market is controlled by a small group of firms.  [31]   In other words, Oligopoly is the state of limited competition between few producers or sellers. Characteristics of Oligopoly:  [32]   Only few companies in the market. Sell either homogenous products or differentiated products. Barriers of entry exist. Mutual interdependence in decision-making Non-price competition exists. An oligopoly is much like a  monopoly, in which  only one company exerts control over most of a market. In an oligopoly, there are at least two firms controlling the market. Kinked demand curve is a demand curve made up of two parts; its suggested oligopolistic follow each reductions, but not price rises. Kinked demand curve can be used to explain why prices in oligopolistic markets are often rigid or stable for relatively long periods of time. Price Rigidity is a condition where one follows a decrease in price but not an increase in price. This is due to the ability of other firms to match prices with it and it often leads to a kinked demand curve.  [33]   Task-5 Keynesian economics: Keynesian economics (also called Keynesianism Theory) is a macroeconomic theory based on the ideas of 20th-century British economist John Maynard Keynes. Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle. The theories forming the basis of Keynesian economics were first presented in The General Theory of Employment, Interest and Money, published in 1936; the interpretations of Keynes are contentious, and several schools of thought claim his legacy.  [34]   Keynesian economics advocates a mixed economy-predominantly private sector, but with a large role of government and public sector-and served as the economic model during the latter part of the Great Depression, World War II, and the post-war Golden Age of Capitalism, 1945-1973, though it lost some influence following the stagflation of the 1970s. As a middle way between laissez-faire capitalism and socialism, it has been and continues to be attacked from both the right and the left. The advent of the global financial crisis in 2007 has caused resurgence in Keynesian thought. Keynesian economics has provided the theoretical underpinning for the plans of President Barack Obama, Prime Minister Gordon Brown and other global leaders to rescue the world economy. Keynesian economics An approach to economic theory and policy derived from the influential writings of the English economist John Maynard Keynes (1883-1946). Prior to Keynes, governments tended to be guided by the argument of laissez-faire economics that an unregulated economy would tend to move towards full employment, and thence equilibrium. Keynes argued (in The General Theory of Employment, Interest and Money, 1936) that equilibrium could be established before that point was reached, and therefore that governments wishing to achieve full employment had actively to intervene in the economy by stimulating aggregate demand; and, conversely, that if full employment resulted in inflation they should act to reduce aggregate demand, in both cases by using the devices of tax (fiscal) policy, government expenditure, and monetary policy (changes in interest rates and the supply of credit). Keynesianism, though forming the basis of economic policy in most Western societies for three decades after the Second World War, was itself challenged by the appearance of stagflation (simultaneous recession and inflation) in the 1970s, and consequently by the economic theories of monetarism. The dispute between these two approaches currently forms the major axis of disagreement within modern economics.  [35]   Monetarist Economics: The Monetarists theory is a development of earlier Classical theoretical work. Their main contribution is in updating many of these ideas to fit them into a more modern context.

Kudler Security Report

Kudler Fine Foods IT Security Report and Presentation Security Considerations CMGT/400 Kudler Fine Foods IT Security Report and Presentation Security Considerations According to Whitman and Mattord  (2010),  The ISO 27000 series is one of the most widely referenced security models.Referencing ISO/IEC 27002 (17799:2005), the major process steps include: risk assessment and treatment, security policy, organization of information security, asset management, human resources security, physical and environmental security, communications and operations management, access control, information systems acquisition, development, and maintenance, information security incident management, business continuity management, and compliance (Chapter 10, Security Management Models). 1.Risk assessment and treatment 2. Security policy: Focuses mainly on information security policy 3. Organization of information security: For both the internal organization and external parties 4. Asset management: Incl udes responsibility for assets and information classification 5. Human resources security: Ranges from controls prior to employment and during employment to termination or change of employment 6. Physical and environmental security: Includes secure areas and equipment security 7.Communications and operations management: Incorporates operational procedures and responsibilities, third-party service delivery management, systems palnning and acceptance, protection against malicious and mobile code, backup, network security management, media handling, exchange of information, electronic commerce services and monitoring 8. Access control: Focuses on business requirement for access control, user access management, user responsibilities, network access control, operating system access control, application and information access control, and mobile computing and teleworking 9.Information systems acquisition, development, and maintenance: Includes security requirements of information systems, correct processing in applications, cryptographic controls, security of system files, security in development and support processes, and technical vulnerability management 10. Information security incident management: Addresses reporting information security events and weaknesses and management of information security incidents and improvements 11.Business continuity management: Information security aspects of business continuity management 12. Compliance: Includes compliance with legal requirements, compliance with security policies and standards, and technical compliance and information systems audit considerations The â€Å"SANS: SCORE† (2012) website provides a free audit checklist for organizations to verify if they comply with the ISO 27002. The following table represents the SANS audit checklist as it relates to Kudler Fine Food’s frequent buyer program. Security policy: Focuses mainly on information security policy | |Section |Audit Question |Security Consider ations |Security concern if |Mitigation | | | | |removed | | |Information security policy|Whether there exists an Information |A security policy is |Without a security policy |Define what needs to be | |document |security policy, which is approved by the |necessary to guide all |in place the restriction |protected in order to | | |management, published and communicated as |access or to block |of information would be |develop a security policy. | | |appropriate to all employees. |access to information. |lost.Uncontrolled access|The importance of the | | | | |will result in the loss of|information should | | |Whether the policy states management | |company information. |determine the severity of | | |commitment and sets out the organizational| | |the security. | | |approach to managing information security. | | | | |Review of Informational |Whether theInformation Security Policy is|The security policy |Without the review of |Each policy should be | |Security Policy |reviewed at planne d intervals, or if |should be reviewed as |security policies they |reviewed periodically to | | |significant changes occur to ensure its |business practices, |will most likely become |ensure its effectiveness. | | |continuing suitability, adequacy and |hardware, software, and |out dated and lose | | | |effectiveness. |the way in which |usefulness. Each policy owner will be | | | |information is shared | |responsible for the review | | |Whether the Information Security policy |change. |Without giving each |of the policy. | | |has an owner, who has approved management | |section of the policy an | | | |responsibility for development, review and|Each part of the policy |owner the policy will have|Each change will be brought| | |evaluation of the security policy. should have an owner who|no one responsible for its|before management before | | | |is responsible for |maintenance. |being brought into action. | | |Whether any defined Information Security |keeping it up to date. | | | | |Pol icy review procedures exist and do they| |A policy to review new | | | |include requirements for the management |A review procedure |policies or changes made | | | |review. should be in place, each|to current policies should| | | | |change made should be |be in place to discourage | | | |Whether the results of the management |reviewed by management. |unauthorized changes. | | | |review are | | | | | |taken into account. | | | | | |Whether management approval is obtained | | | | | |for the revised policy. | | | |Organization of Information Security | |Section |Audit Question |Security |Security concern if |Mitigation | | | |Considerations |removed | | |Management commitment to|Whether management demonstrates active support for |An active role |Without the active support|A definition of the role | |information security |security measures within the organization.This can be|by management |of management the security|management should play in | | |done via clear direction, demonstrated commitment, |is needed to |policy will lose its |the commitment to the | | |explicit assignment and acknowledgement of information|ensure the |effectiveness. |security policy should be | | |security responsibilities. |effectiveness | |stated in the security | | | |of the security| |policy. | | | |policy. | | |Information security |Whether information security activities are |Security |Information security |Ensure that the owner of | |coordination |coordinated by representatives from diverse parts of |activities need|activities need to be |each policy is responsible | | |the organization, with pertinent roles and |to be |organized by employees |for all activities | | |responsibilities. |coordinated by |with higher roles and |associated with the | | | |representatives|responsibilities. The |policies. | | |that carry |security policies protect | | | | |pertinent roles|the information and all | | | | |and |activities associated with| | | | |responsibilitie|the security policy should| | | | |s. |be made by responsible | | | | | |parties. | |Allocation of |Whether responsibilities for the protection of |The business |Without a clear set of |A clear set of instructions| |information security |individual assets, and for carrying out specific |will suffer a |rules governing the |will be provided to ensure | |responsibilities |security processes, were clearly identified and |great many |protection of individual |that each individual asset | | |defined. |losses due to |assets and security |and each security process | | | |unclear |processes the business |is clearly defined. | | |detentions of |will surely suffer a loss. | | | | |procedures. | | | |Authorization process |Whether management authorization process is defined |Authorization |Without the use of an |Any and all information | |for information |and implemented for any new information processing |processes need |authorization system a new|processing facilities need | |processing facilities |facility within the org anization. to be clearly |information processing |to be given ownership to a | | | |stated in the |facility would be left |member of management. This| | | |security |vulnerable for attack. |member needs to ensure the | | | |policy. Any | |security policy is | | | |new information| |followed.Using the proper| | | |processing | |authorization system is | | | |facility needs | |critical to securing the | | | |to have an | |information contained | | | |authorization | |within. | | | |process | | | | | |implemented. | | |Confidentiality |Whether the organization’s need for Confidentiality or|The NDA should |Without the use of an NDA |The NDA needs to be | |agreements |Non-Disclosure Agreement (NDA) for protection of |be clearly |the legal ramifications |reviewed periodically to | | |information is clearly defined and regularly reviewed. |defined. This |are greatly lessened. A |ensure that any changes in | | | |will help to |business needs to protect |the business are reflected | | |Does this address the requirement to protect the |ensure the |its data to the fullest |in it. | | |confidential information using legal enforceable terms|information is |extent of the law. | | | |not | | | | | |compromised. | | | |Contact with authorities|Whether there exists a procedure that describes when, |This is |The time it takes to act |A plan must be in place for| | |and by whom: relevant authorities such as Law |important to |in an emergency is crucial|different types of | | |enforcement, fire department etc. should be |the physical |to keeping employees and |emergencies involving any | | |contacted, and how the incident should be reported. |security of the|the business safe. A plan|outside authorities. This | | | |business and |must be in place to avoid |can help to prevent | | | |the employee |potential losses due to |injuries and harm done to | | | |within. |unforeseen events. |employees and the business. |Contact with special |Whether appropriate contacts with special interest |Contacts with |Allowing a third party |A policy needs to define | |interest groups |groups or other specialist security forums, and |third party |group access to any |the steps needed to apply | | |professional associations are maintained |groups need to |information can be a risk |for special interest groups| | | |be approved my |to the business. All |and how the relationship is| | | |management. third party associations |maintained. | | | | |should be approved in | | | | | |advance by management. | | |Independent review of |Whether the organization’s approach to managing |Security |The loss of strength to |To ensure the highest level| |information security |information security, and its implementation, is |management |the security of |of security a review should| |reviewed independently at planned intervals, or when |should be |information can occur |be implemented periodically| | |major changes to security implementation occur. |reviewed at |through time (small |and whenever a major change| | | |planned |changes) or when a major |takes place. | | | |intervals and |change has taken place. | | | | |when major | | | | | |changes occur. | | |Identification of risks |Whether risks to the organization’s information and |Allowing third |Allowing third parties |Strict rules and an access | |related to external |information processing facility, from a process |parties access |access to the business |policy must be implemented | |parties |involving external party access, is identified and |to the network |network and the contents |to allow a third party | | |appropriate control measures implemented before |poses serious |of the business systems |access to any information | | |granting access. |risks to the |poses a serious threat to |in the business. | | | |integrity of |the integrity of the | | | | |the |system. | | | |information. | | | |Addressing security when|Whether all identified security requirements are |Allowing |Allowing customers access |Access to information by | |dealing with customers |fulfilled before granting customer access to the |customers with |to information in the |customers should be stated | | |organization’s information or assets. |the access to |business system poses a |in the security policy. | | | |certain |threat. Customers should only be | | | |information can| |allowed access to minimal | | | |help to | |information, a separate | | | |increase | |website or informational | | | |customer base | |address. | | | |and customer | | | | | |awareness. | | |Addressing Security in |Whether the agreement with third parties, involving |All third party|Agreeing with a third |Any third party contract | |third party agreements |accessing, processing, communicating or managing the |agreements |party contract can hold |should be reviewed by the | | |organization’s information or information processing |should be |some legal ramifications. |legal department to ensure | | |facility, or introd ucing products or services to |reviewed before| |the contract agrees with | | |information processing facility, complies with all |implementation. | |all of the businesses | | |appropriate security requirements | | |security requirements. |Asset Management | | | |Section |Audit Question |Security Considerations |Security concern if |Mitigation | | | | |removed | | |Inventory of Assets |Whether all assets are identified and an |The businesses assets |Without a clear definition|Each new asset will be | | |inventory or register is maintained with |need to be registered to|of assets the business |registered and assigned an | | |all the important assets. |ensure their safety. |could suffer a loss or |owner. | | | |theft of assets. | | |Ownership of Assets |Whether each asset identified has an |The security policy must|The business could suffer |Each new asset should have | | |owner, a defined and agreed-upon security |include clearly defined |a loss without giving the |an owner and restr ictions | | |classification, and access restrictions |parameters for |asset an owner and |to its access. | | |that are periodically reviewed. |registering assets. defining access | | | | | |restrictions. | | |Acceptable use of Assets |Whether regulations for acceptable use of |Legal issues and profits|Without regulations on the|Defineing all acceptable | | |information and assets associated with an |losses could occur from |use of assets the company |uses of business assets is | | |information processing facility were |the misuse of assets. |could suffer losses and |crucial. | | |identified, documented and implemented | |legal issues. | |Classification guidelines |Whether the information is classified in |Classification of |By classifying information|All information should be | | |terms of its value, legal requirements, |information is crucial |is can be easier to |classified in terms of its | | |sensitivity and criticality to the |to the business. This |determine who has access |va lue, legal requirements, | | |organization. |will determine who has |to it. |and sensitivity to ensure | | | |access to the | |it is only accessible to | | | |information. |authorized users. | |Information Labeling and |Whether an appropriate set of procedures |A set of organizational |Unorganized information |All information should be | |handling |are defined for information labeling and |parameters should be |can result in the loss of |organized within a set of | | |handling, in accordance with the |devised to create a |the information. |parameters defined in the | | |classification scheme adopted by the |classification scheme. | |classification scheme. | | |organization. | | | |Human Resources Security | |Section |Audit Question |Security Considerations |Security concern if |Mitigation | | | | |removed | | |Roles and responsibilities |Whether employee security roles and |All personnel authorized|Unauthorized access of |All confidential | | |responsibilities, contractors and third |to access confidential |this information could |information should be | | |party users were defined and documented in|information needs to be |result in identity theft. |handled by authorized | | |accordance with the organization’s |identified by management| |personnel only. | |information security policy. |team. | | | | | | | | | | |Were the roles and responsibilities | | | | | |defined and clearly communicated to job | | | | | |candidates during the pre-employment | | | | |process | | | | |Screening |Whether background verification checks for|All applicants |If not performed, persons |All employees should be | | |all candidates for employment, |considered for |with a history of theft |free of any criminal | | |contractors, and third party users were |employment have to |could be hired. |history that may cause | | |carried out in accordance to the relevant |undergo a criminal | |concern to the company. | | |regulations. |background check prior | | | | | |to a job offer bei ng | | | | |Does the check include character |made. | | | |reference, confirmation of claimed | | | | | |academic and professional qualifications | | | | | |and independent identity checks | | | | |Terms and conditions of |Whether employee, contractors and third |Management must define |Unauthorized access of |To prevent confidential | |employment |party users are asked to sign |what information is |this information could be |information to be disclosed| | |confidentiality or non-disclosure |confidential in |used for personal use. |to unauthorized persons. | | |agreement as a part of their initial terms|accordance to existing | | | | |and conditions of the employment contract. |laws and company policy. | | | | | | | | | | |Whether this agreement overs the | | | | | |information security responsibility of the| | | | | |organization and the employee, third party| | | | | |users and contractors. | | | | |Management responsibilities|Whether the management requires employees,|Management must define |Unauthorized access could |To prevent confidential | | |contractors and third party users to apply|which users have to have|be used for personal gain. |information to be disclosed| | |security in accordance with the |this access. | |to unauthorized persons. | |established policies and procedures of the| | | | | |organization. | | | | |Information security |Whether all employees in the organization,|Management and Loss |Private information could |To educate all personal | |awareness, education and |and where relevant, contractors and third |Prevention must develop |be disclosed to |about privacy policy. | |training |party users, receive appropriate security |a training program and |unauthorized persons for | | | |awareness training and regular updates in |establish how often it |personal use. | | |organizational policies and procedures as |needs to be | | | | |it pertains to their job function. |administered. | | | |Disciplinary process |Whether there is a formal discipl inary |Management must |Private information could |To advise employees what | | |process for the employees who have |establish corrective |be disclosed to |recourse their actions will| | |committed a security breach. |action measures if there|unauthorized persons for |have. | | | |is a security breach. |personal use. | |Termination |Whether responsibilities for performing |Management must advise |If an employee was not |To define the procedures of| |responsibilities |employment termination, or change of |what actions will |properly terminated could |terminating employment. | | |employment, are clearly defined and |terminate employment and|result in a lawsuit. | | | |assigned |what procedures are | | | | | |involved in the | | | | | |termination process. | | |Return of assets |Whether there is a process in place that |Management must define |If not returned, certain |To ensure that all | | |ensures all employees, contractors and |what materials employees|company items could be |appro priate company | | |third party users surrender all of the |must return upon |used for personal use. |materials are returned. | | |organization’s assets in their possession |employment. | | | | |upon termination of their employment, | | | | | |contract or agreement. | | | |Removal of access rights |Whether access rights of all employees, |Management will define a|If not defined, it is |To prevent unauthorized | | |contractors and third party users, to |timeframe in which a |possible that a terminated|personnel from accessing | | |information and information processing |terminate employee |employee could still |company information. | | |facilities, will be removed upon |access is removed |access company | | | |termination of their employment, contract | |information. | | | |or agreement, or will be adjusted upon | | | | | |change. | | | |Physical and Environmental Security | |Section |Audit Question |Security Considerations |Security concern if |Mitigation | | | | |removed | | |Physical security perimeter|Whether a physical border security | | | | | |facility has been implemented to protect | | | | | |the information processing service. | | | | | | | | | | | |Some examples of such security facilities | | | | | |are card control entry gates, walls, | | | | | |manned reception, etc. | | | |Physical entry controls |Whether entry controls are in place to |Physical access to |potential for security |server room should be | | |allow only authorized personnel into |system |breach through |locked with access | | |various areas within the organization. | |unauthorized access to |restricted to authorized | | | | |physical equipment. |personnel.Sophistication | | | | | |of restraint would be | | | | | |dependent upon importance | | | | | |of information and budget. | |Securing offices, rooms, |Whether the rooms, which have the | | | | |and facilities |information processing service, are locked| | | | | |or have lockable cabinets or safes. | | | |Protecting against external|Whether the physical protection against |corruption and/or loss |loss of critical data. |Data and system redundancy,| |and environmental threats |damage from fire, flood, earthquake, |of information due to | |off-site storage and/or | | |explosion, civil unrest and other forms of|environmental conditions| |multiple servers at | | |natural or man-made disaster should be | | |different locations. | | |designed and applied. | | | | | | | | | | |Whether there is any potential threat from| | | | | |neighboring premises. | | | | |Working in secure areas |Whether physical protection and guidelines| | | | | |for working in secure areas is designed | | | | | |and implemented. | | | | |Public access delivery and Whether the delivery, loading, and other | | | | |loading areas |areas where unauthorized persons may enter| | | | | |the premises are controlled, and | | | | | |information processing facilities are | | | | | |isolated, to avoid unauthorized access | | | | |Equipment sittin g |Whether the equipment is protected to | | | | |protection |reduce the risks from environmental | | | | | |threats and hazards, and opportunities for| | | | | |unauthorized access | | | | |Supporting utilities |Whether the equipment is protected from | | | | | |power failures and other disruptions | | | | | |caused by failures in supporting | | | | | |utilities. | | | | | | | | | | |Whether permanence of power supplies, such| | | | | |as a multiple feed, an Uninterruptible | | | | | |Power Supply (ups), a backup generator, | | | | | |etc. are being utilized. | | | | |Cabling security |Whether the power and telecommunications | | | | | |cable, carrying data or supporting | | | | | |information services, is protected from | | | | | |interception or damage. | | | | | | | | | | |Whether there are any additional security | | | | | |controls in place for sensitive or | | | | | |critical information. | | | | |Equipment Maintenance |Whether the equipment is correctly | | | | | |maintained to ensure its continued | | | | | |availability and integrity. | | | | | | | | | | |Whether the equipment is maintained, as | | | | | |per the supplier’s recommended service | | | | | |intervals and specifications. | | | | | | | | | | | |Whether the maintenance is carried out | | | | | |only by authorized personnel. | | | | | | | | | | |Whether logs are maintained with all | | | | | |suspected or actual faults and all | | | | | |preventive and corrective measures. | | | | | | | | | | | |Whether appropriate controls are | | | | | |implemented while sending equipment off | | | | | |premises. | | | | | | | | | | |Are the equipment covered by insurance and| | | | | |the insurance requirements satisfied | | | | |Securing of equipment |Whether risks were assessed with regards |off-site data storage |off-site data may be |proper security measures in| |off-premises |to any equipment usage outside an |centers provide a level |compromised or otherwise |place to ensure integrity | | |o rganization’s premises, and mitigation |of redundancy to |corrupted due to |of data. | | |controls implemented. maintain integrity in |insufficient security | | | | |the event of a local |measures | | | |Whether the usage of an information |breach | | | | |processing facility outside the | | | | | |organization has been authorized by the | | | | | |management. | | | |Secure disposal or re-use |Whether all equipment, containing storage | | | | |of equipment |media, is checked to ensure that any | | | | | |sensitive information or licensed software| | | | | |is physically destroyed, or securely | | | | | |over-written, prior to disposal or reuse. | | | | |Removal of property |Whether any controls are in place so that | | | | | |equipment, information and software is not| | | | | |taken off-site without prior | | | | | |authorization. | | | |Communications and Operations Management | |Section |Audit Question |Security Considerations |Security concern if |Mitigation | | | | |rem oved | | |Documented Operation |Whether the operating procedure is |Management should set |Without direction, |To establish how the | |Procedures |documented, maintained and available to |guideline about how each|employees would not know |company is to operate on a | | |all users who need it. |function should operate |what to do throughout the |daily basis. | | | |in the company. |day. | | |Whether such procedures are treated as | | | | | |formal documents, and therefore any | | | | | |changes made need management | | | | | |authorization. | | | | |Change Management |Whether all changes to information | | | | | |processing facilities and systems are | | | | | |controlled. | | | |Segregation of duties |Whether duties and areas of responsibility|Management is |No one would be |To establish accountability| | |are separated, in order to reduce |responsible for |responsible for ensuring |for task performed in each | | |opportunities for unauthorized |assigning area of |tasks are complete d. |area. | | |modification or misuse of information, or |responsibility. | | | | |services. | | | |Separation of development, |Whether the development and testing |Management needs to |Incorrect information |To prevent incorrect | |test, and operational |facilities are isolated from operational |establish a separate |could cause a delay in |information is not given to| |facilities |facilities. For example, development and |network. |production or development. |incorrect personnel. | | |production software should be run on | | | | | |different computers.Where necessary, | | | | | |development and production networks should| | | | | |be kept separate from each other. | | | | |Service delivery |Whether measures are taken to ensure that |Define what measures are|Goods and services will |To ensure that service | | |the security controls, service definitions|needed and establish who|not be done in a timely |level is established and | | |and delivery levels, included in the third|to monit or. |manner. |maintained. | |party service delivery agreement, are | | | | | |implemented, operated and maintained by a | | | | | |third party | | | | |Monitoring and review of |Whether the services, reports and records |Define what measures are|Goods and services will |To ensure that service | |third party services |provided by third party are regularly |needed and establish who|not be done in a timely |level is established and | | |monitored and reviewed. |to monitor. |manner. |maintained. | | | | | | | |Whether audits are conducted on the above | | | | | |third party services, reports and records,| | | | | |on regular interval. | | | | |Managing changes to third |Whether changes to provision of services, |Define what measures are|Goods and services will |To ensure that service | |party services |including maintaining and improving |needed and establish who|not be done in a timely |level is established and | | |existing information security policies, |to monitor. |manner. |maintai ned. | | |procedures and controls, are managed. | | | | | | | | | | |Does this take into account criticality of| | | | | |business systems, processes involved and | | | | | |re-assessment of risks | | | | |Capacity management |Whether the capacity demands are monitored|Management must decide |Systems will not be able |To establish who will | | |and projections of future capacity |if a third party will be|to process information |monitor computer systems. | | |requirements are made, to ensure that |needed to assist with |needed in a timely manner. | | | |adequate processing power and storage are |their IT needs. | | | | |available. | | | | | | | | | | |Example: Monitoring hard disk space, RAM | | | | | |and CPU on critical servers. | | | | |System acceptance |Whether system acceptance criteria are |Management must decide |Systems will not be able |To establish who will | | |established for new information systems, |if a third party will be|to process information |monitor computer syst ems. | | |upgrades and new versions. |needed to assist with |needed in a timely manner. | | | | |their IT needs. | | | |Whether suitable tests were carried out | | | | | |prior to acceptance | | | | |Controls against malicious |Whether detection, prevention and recovery|IT personnel must ensure|Unauthorized access could |Establish measures to | |code |controls, to protect against malicious |proper measures are in |lead to system shut down. |protect from virus and | | |code and appropriate user awareness |place. | |malware. | | |procedures, were developed and | | | | | |implemented. | | | | |Controls against mobile |Whether only authorized mobile code is | | | | |code |used. | | | | | | | | | | |Whether the configuration ensures that | | | | | |authorized mobile code operates according | | | | | |to security policy. | | | | | | | | | | | |Whether execution of unauthorized mobile | | | | | |code is prevented. | | | | | | | | | | |(Mobile code is software code that | | | | | |transfers from one computer to another | | | | | |computer and then executes automatically. | | | | | |It performs a specific function with | | | | | |little or no user intervention. Mobile | | | | | |code is associated with a number of | | | | | |middleware services. | | | | |Information backup |Whether back-ups of information and |IT personnel will ensure|If not properly manage |To establish back up and | | |software is taken and tested regularly in |that system is properly |could result in loss of |recover of data procedures. | | |accordance with the agreed backup policy. |working. |data. | | | | | | | | | |Whether all essential information and | | | | | |software can be recovered following a | | | | | |disaster or media failure. | | | |Network Controls |Whether the network is adequately managed |IT personnel must ensure|Unauthorized access could |Establish measures to | | |and controlled, to protect from threats, |proper measures are in |lead to system shut down. |protect from virus and | | |and to maintain security for the systems |place. | |malware. | | |and applications using the network, | | | | | |including the information in transit. | | | | | | | | | | |Whether controls were implemented to | | | | | |ensure the security of the information in | | | | | |networks, and the protection of the | | | | | |connected services from threats, such as | | | | | |unauthorized access. | | | |Security of network |Whether security features, service levels |IT/Third party will |The company may not be |To establish what security | |services |and management requirements, of all |advise management the |aware of what is needed to|features of needed to | | |network services, are identified and |necessary requirements |secure the network and the|maintain the network. | | |included in any network services |needed for the network. |system is broken into | | | |agreement. | |compromising information. | | | | | | | | |Whether the ability of the network service|

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Legalism and Confucianism - Free Essay Example

Sample details Pages: 2 Words: 522 Downloads: 2 Date added: 2019/07/01 Category Philosophy Essay Level High school Tags: Confucianism Essay Did you like this example? In period one (10,000 BCE 600 CE), the belief systems of Confucianism and Legalism spread throughout the Middle East/Asia. As these systems grew and developed, they began to affect the way political structures were run and the way the society worked and operated. These systems were essential to history during this time. Legalism had the idea that harsh government was the way society should be run as Legalists believed that humans are more inclined to do bad instead of good. Political leaders like Shi Huangdi, leader of the Qin dynasty (China), adapted to this system and used it. Legalism was likely used in China because Shi Huangdi was a paranoid ruler and he believed that Harsh laws would keep his citizens in line. Legalism focused on harsh laws, with harsh punishments for those who broke these laws. Don’t waste time! Our writers will create an original "Legalism and Confucianism" essay for you Create order This, in turn, kept society rigid as some punishments included death. As another incentive to stay true to the law and Huangdi, rewards were put in place for those who followed these harsh laws. Legalism remained the central belief system of China until the fall of Shi Huangdi and the Qin dynasty all together. A benefit of Legalism was the lack of crimes being committed because of these harsh laws. A negative issue of Legalism was that most saw it as too strict. This caused revolts to sometimes occur, but anyone opposing the rule of Shi Huangdi was killed. The effects of Legalism can be seen today. China was split into several warring states before legalism was implemented, so Shi Huangdi and Legalism centralized China. Eventually, Legalism was abandoned and other belief systems began to take over, including Confucianism. Confucianism focused on Filial Piety, the utmost respect for parents at all times. but this concept applied to leaders, friends, older brothers, etc. China eventually adapted to this system during the Han dynasty after the fall of the Qin. Confucianism was more lenient than Legalism and didnt have as many harsh ideals. Also, Confucianism focuses on order of society which is very important. Politically, it was essential that respect was given to leaders, and leaders gave this respect back to its people. Leaders were not to be corrupt in any way. A crucial benefit was that Confucianism was about peace and respect unlike Legalism, which prevented revolts and most violence in China. A negativity to it, was that it degraded women and saw men as more superior to them, which in turn, forced women to do more menial tasks around the house. Effects of Confucianism were clear: Everybody had a role to do, and peace and respect were to be given at all times. Legalism and Confucianism, both primary belief systems of China at one point, played a major role in the way China was run politically and socially. Legalism, harsher than Confucianism, focused on strict laws with rewards for those who obeyed them. But, Confucianism was about respect and fair government. Even if very different, both systems were about keeping society in line, whether it be through law or respect. This played a major role on China and likely affected the way it is today.