1969-02-16 — Page 24

翼四象張六第日十三月二十年申戊屬靈 WAH KIU YAT PO

日橋 日僑華

日期星

日六十月二年九六九 -曆公年八十五國民 育僑牶

143%3 #3 #3 #29%3/

學會考試題預習

1969

經濟及公共事務科 (十五)·劉竒激

Economic & Public Affairs

Lecture No. 15

By K.M.

Answers to the Questions in Exercise No.

Question: (1) Describe briefly the development or our monetary system, and point out the pros and cons of our present form of money.

Answer:

In primitive times the inhabitants of the earth lea simple independent lives. Their economic system was one that was completely different from that of ours today. We call their system subsistence economy They hunted, fished and later grew crops and made things all by themselves. There were no doctors, dentists, lawyers, bus-conductors or such specialists as we have now.

The people were all very simple-minded. Their needs were few and could be easily satisfied. They needed no inventions and they depended on no one. Everybody had to work on his own and get what he wanted. Money to them, of course, would be useless, and so they needed no m

money.

As the years passed by, people began to think that it would be better for them if they could exchange their goods and services with one another. It would enable each person to enjoy what the others produced. This idea of exchanging goods for goods rapidly spread, and people began to like the idea. With the introduction and application of division of labour, the idea was accepted by everyone in the civilized world. Thus from subsistence economy, people had developed it into the barter economy. but they soon discovered that this system presented a number of difficulties.

Firstly, it was always difficult to find the. right person who was willing to exchange his goods for something else; provided this person needed the -product that was offered to him, he would be reluctant

to give away what he produced.

Secondly, it was also always difficult for two persons to agree to the rate of exchange between their goods, for there was no standard measurement for the value of goods, as there were standard measurements for weight and length. For instance now many fish would a fishmonger think reasonable to exchange for how many pounds of pork from a butcher?

Thirdly, how were wages to be paid? Most people had difficulty in employing workers, unless tha workers were willing to accept the type of goods their employers produced as payment of their services. This difficulty got worse when a worker was employed by one who did not produce goods but provided a service such as that of a dentist. How would he be paid then?

Finally, the problem of future insecurity could not be solved, It would be unthinkable if one had to store up eggs, rice, pigs, goats and vegetables in one's home for use when he reached old age!

30 the great thinkers and rulers got together to BOLve these problems which existed under the barter economy. Eventually everybody agreed that there, should be a medium of exchange to be used by everyone

The idea was an excellent one, and no doubt, would be able to solve some of the problems caused by the barter economy. At different times and in differ- ent places, many things had been used as the medium. of exchange such as sea-shells, goats and gold-dust. Later it was found that this medium of exchange could also act as a unit of account, a measure and storer of value, thus solving all the problems created by the barter system.

This medium of exchange is called money and wa can, therefore, be said to be working and living under the money economy. Today through the development of our economic studies and practices we have dispensed with the old forms of money, and instead, we are now using cheques, legal tender, credit cards. postal and money orders, and among them there are advantages and disadvantages.

Cheques compared with legal tender are safer and incre convenient to use especially when large sums of money are involved. It is quite safe, for instance. to send a cheque (if it is crossed) by post to a friend. Une does not have to carry large bundles of dollar-notes and bags of coins when going to purchase

Large commodities such as motor-cars. A cheque is all one needs to bring along. Cheques save the time that may be wasted in counting and checking how much money there is when legal tender is used, and they also save effort that is required in carrying legal tender around.

But it has been known that unscrupulous people often write out cheques even they do not have money in the bank. Though writing out false cheques is a criminal offence, it is more difficult to prevent than to detect it. Thus, it is for one's own protection that one does not receive a cheque from a complete stranger.

For small sums of money, it is wise to use legal tenger, for in that case one can save the stamp duty which is required in all cheques, and also when using legal tender one is certain of its acceptance by anyone. But legal tender is unsafe and is Inconvenient to carry around. It may be lost, stolen or robbed. It would also look ridiculous if one darries two baskets of banknotes to go shopping! Most employers today open current or savings accounts for, their staffs to eliminate the difficulties found

in the use of legal tender.

Most people today do not carry cheques or legal tenaer when they go to certain places. They carry credit cards, which may be considered as a means of deferred payment. If a person is creditworthy (that is to say he is trustworthy and he is solvent) a commercial enterprise (such as a restaurant, hotel or a department store) is willing to issue him what is known as a credit card, so that wherever he makes use of the firm he needs only to sign for the bills presented to him. At the end of the month, he is then called upon to pay for the amount he had spent. Thus, credit cards are regarded as money, and they are

becoming increasingly popular. They can also solve the problem of tipping!

Question: (2) Explain why "Management" is an

essential factor of productio

Answer:

Long, long age, economists believed that the number of factors that had to be present before production could take place was three. They maintain ed that the presence of land (under which were. included the natural resources, sites for the of factories, roads and the forces of Nature), capital (by which is meant tools and machinery. needed in the factories, an alternative to which would be money which can be used to purchase the tools and machinery), and labour (by which is meant the people employed in the work) would be sufficient to turn out consumer goods as well as capital goods.

Economists today have a different view about the factors of production. They contend that the old theory cannot work in modern business practices. They ask, first and foremost, how the three factors could be brought together. land, capital and labour are isolated factors, each of which is not individually obliged to be co-ordinated with the others, and even if they could, can each decide on its own, the amount it has to contribute in orde to blend with the others without causing an excess

(which will be an absolute waste) or a deficiency (which will adversely affect the productivity of the work)?

They argue that without another factor, production cannot take place at all. This factor they call management or organization. Under this factor are included those whose job is to organize the other three factors, and to advise and guide during the productive process, and to be responsible for any inefficiency that may exist

Those who are involved in this factor are usually known as entrepreneurs. Their work is a specialized one. Their first task is to plan and organize the other factors. They have to decide what sort of praiucts the firm is going to produce and for what type of market.

They need also to know the production costs, snu wherever possible they must try to reduce these in order that the prices of the commodities of the firm are competitive, but, on the other hand, they must never sacrifice, quality for cheap price.

Most consumers today prefer to pay more for

goods that have a better quality, for these goods ensure longer durability and give greater satisfaction in the long run. The entrepreneurs must be aware of changes in market demands., They have to find out the needs of the consumers, and what modern fashions demand, if their products are to be marketable. The other three factors are certainly not involved in this direction of production. They are concerned with only bringing manufactured goods into existence. Whether these goods are salable or they are able to meet the consumers requirements is not their immediate concern, Management ja definitely responsible for the ultimate quality and the price of the goods produced

To increase or not the prices of the goods 1s another important consideration for the entrepreneurs, for while it may reap greater profits for the company by raising the price, it may on the contrary, price the products out of the market. However, if the price is not raised demand and supply may not be equated, and popularity of the goods will eventually diminish The entrepreneurs must necessarily conduct market research and surveys in order to determine the company's future policies.

It is also obvious that without management, there) will be no one to undertake the initial risk which exists in all forms of enterprises in the early stages of their operations. Success or failure in the company's business is chiefly attributed to the capability or inefficiency of those whose work is connected with management. That is to say, therefore, that if the entrepreneurs are not properly trained and they lack administrative and managerial experience, the sales of the company's products will drop considerably.

Management is also involved in expanding the existing markets of the company's products. Advertising is a powerful modern method of increasing the sales of products, and this takes the form of presenting

commercials over the radio, the television and in the cinemas, or by staging exhibitions or trade fairs,

יי

Entrepreneurs must know what advertising is and now it can be put into profitable service for the company. They have to come up with ideas to attract more people to purchase their products. It car therefore be seen that without management the products will remain unknown. The greater the publicity that is given to the products, the greater will be the public Semand for the products.

Today if the working conditions in a factory arsi unsatisfactory the blame is invariably put on the management. It is therefore obvious that management exists to look after the welfare of the workers, to train them up and to pay them reasonably well. It must be remembered that workers' efficiency is related to the productivity of the work. Management ensures that workers are not given any cause for complainta or stoppage of work.

Management 19 8190 concerned with the issue of new shares of the company in order to raise more money to

xpand the company's operations. By providing more ervices or by selling more and new products, the

company can expect to earn greater profits. Most firms

oday, when business is good expand or merge with others, for the same reason. Management is responsible For raising not only new capital for exapnsion purposes but also the initial capital during the early days of The company's operations.

Shareholders wish to know who the people are who bake up the management of the company, for on their shoulders lies the future of the company. Management is logically an essential factor of production, and its significance is shown by the growing number of courses that are now run in technical institutes and universities for the training of future entrepreneurs. These courses are increasingly popular and attract very large enrolments, indeed.

Exercise No. 14

write "True" or "False" wherever applicable for each) of the following statements:.

(a) Money cannot be reliably considered as a store

of value because its value fluctuates all the time.

(b) The Attorny General gives legal advice to the

Governor.

(c) All qualified teachers in Hong Kong must be

trained by the Teachers' Training College. (d) The Department of Commerce and Industry hears

complaints from both overseas and local importers; (e) Children below the age of 10 are not allowed to

be employed in local factories.

Which Government departṛent :

(a) issues licences for possession or arms? (b) runs a mobile library for children in

resettlement estates?"

c) checks and repairs Government vehicles? (d) is responsible for pest control?

(e) supplies overseas countries with information

"about our Government7

Fill the blanks: (a)

protects shopkeepers against damage to their shop-windows

(b) To provide oneself a retirement plan one

should take out

policy

(a) The

industry. __(d) The ____

ceases to function properly.

is Hong Kong's second money-earning

takes over control or a bank when it

(e) Primitive people lived under the

they had no neighbourly co-operation.

because.

What does each of the following abbreviations stand For-

(a) D.P.A.S.

(b) P.A.T.E

(c) E.T.V.

(d) 1.1.0.

(e) H.K.3.R.G|

What is the correct economic term" for each of the following:-.

(a) A unit of account.

(b) Protection for the people provided by the

government in times of adversities

(c) Drop in the general level of prices. (d) The system under which people in industry

specialize in definitë tasks.

The exchange of goods for goods.

(f) A commercial document which entitues a person

to be paid after carrying out a certair. performance.

(g) Official receipts which enable note-issuing banks to print banknotes whenever necessary (h) An institution that facilitates the settling

of accounts among banks arising from the use of cheques.

(1) The amount of stamp duty depending on the

value of the documents in question The extracting of raw materials from Nature,

Answer the following questions:-

(a) What is the rate of interest per annum pa 10

on Tax Reserve Certificates? (b) Which is the largest housing scheme in

Kowloon undertaken by a private enterprise? (e) who normally takes over the Governor's place

when the Governor is on leave?

(d) What is the name given to Government

departments collectively?

(e) sho holds the position of Commander-in-Chief

of the Colony?

(f) Government has appointed a number of them in

different areas of Hong Kong to solve community problems. What are they called? (g) To educate hong kong motorists on road

manners the Traffic Branch of the Rolice has introduced 2 special vehicles which recognized by 2 colours.!

What are the colours? **

Name the institution that collects public). donations for charity organizations that Lre its members?

11 Name the organization that provides

insurance in respect of economic and political risks?

3) Under what oronance are banks in Hong Kone

controlled?.