Middle semester exam 2021/2022

Start by chanting the Name of your Lord, Happy Work!

Abdullayev Azamat
IMEC-01


Answers:

1. 
   Economics means allocating the limited resources of the world to the unlimited needs of the people. Accordingly, the use of money in accordance with the Shari'ah, that is, the Qur'an and the Hadith, is the basis of the Islamic economy. In the capitalism an economic crisis is observed almost every 5 years. Islamic finance has been recognized by economists around the world as the most effective solution in mitigating these crises. Islam as a comprehensive doctrine not only offers basis of a credible social contract and institutions that address issues of welfare and equity effectively, but it also defines the purpose of human existence which gives deeper meaning to life.
   
2. 
   Knowledge economy is a set or tool that a person can use to calculate interest, production costs, production efficiency, and other things related to it. The main goal is to know how much profit will be made.
   

Economic system is a set of rules, values, and norms of behavior that organize economic life in a society and establish production relations. In Islam, these rules and norms have been developed by thousands of jurists over the last 1,400 years in response to the Islamic order recognized in the Qur'an and Sunnah, as well as the changing conditions and evolving lives of Muslims around the world.

3. 
   a) Scarcity, a foundational concept of neoclassical economics. It argues that class inequalities and the pursuit of profit shape the configurations of scarcity faced by individuals and groups in today's society. These configurations are made up of socially constructed material wants (the demand side) and of unequally distributed resources (the supply side).
   

Value refers to the regulatory principle of the economic exchange of the products of human labor. The relative exchange values of these products in trade, usually expressed in monetary terms, are proportional to the average amount of human labor.
Price, the amount of money that has to be paid to acquire a given product. Insofar as the amount people are prepared to pay for a product represents its value, price is also a measure of value. So long as they are not artificially controlled, prices provide an economic mechanism by which goods and services are distributed among the large number of people desiring them. They also act as indicators of the strength of demand for different products and enable producers to respond accordingly.
b) How is the economic system of Islam different from capitalist economy? Islam recognizes a limited but important role of government in an Economy. An Islamic government steps into an economy only when the market fails to operate on its own. According to Islam, there is no role of government under capitalism as the invisible hand takes of the market.

Scarcity has only discussed about the problems of present generation, not anything about future generation. Some economists claimed that economic problem also arises from the plenty of goods as well. The Great Depression of 1930s in USA was due to abundance of goods, but not due to scarcity of resources.

4. 
   Socialism is a populist economic and political system based on public ownership (also known as collective or common ownership) of the means of production. Those means include the machinery, tools, and factories used to produce goods that aim to directly satisfy human needs.
   

The chief economic problem of socialism has been the efficient performance of the very task for which its planning apparatus exists—namely, the effective coordination of production and distribution. The socialist experiments of the 20th century were motivated by a genuine interest in improving life for the masses, but the results instead delivered untold suffering in terms of economic deprivation and political tyranny.

5.