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Atibiyanesh 22 (1
Atibiyanesh 22 (1
DEPARTMENT OF ECONOMICS
PRACTICAL ATTACHMENT REPORT SUBMETTID TO DEPARTMENT OF ECONOMICS
Title: OFFICE OF FINANCE AND ECONOMICS DEVELOPMET.
BY:ATIBIYANESHBIRHAN
IDNO:1202164
MARCH 2023
SAMARA Ethiopia
1.Analyze the fundamental mistakes committed by classic
economists in their theoires according to keynes?
the main points of Keynes’ criticisms against the classical theory: such as
Classical economists rest on Say’s Law which blindly assumed that supply
always creates its own demand and affirmed the impossibility of general
overproduction and disequilibrium in the economy. Keynes totally disagreed
with this view and stressed the possibility of supply exceeding demand, causing
disequilibrium in the economy and pointed out that there is no automatic self-
adjustment in the economy.
Thus, Keynes pointed out the error of the classicists in denying general
overproduction and unemployment. He also pointed out that the economic
system in reality is never self-balancing in character. He, therefore, maintained
that State intervention is necessary for adjustment between supply and demand
in the economy.
Keynes pointed out that trade unions are an integral part of the modern
industrial system and they could certainly resist a wage-cut policy. Strikes and
labour unrest are the bad consequences of such a policy.
Keynes strongly attacked the classicists for their unrealistic approach to the problems of
contemporary capitalist economic system. Pigou’s plea for a return to free perfect
competition to solve the problem of unemployment seemed ‘obsolete’ in the changed
conditions of the modern world.
As per Keynes theory of employment, effective demand signifies the money spent on the
consumption of goods and services and on investment.
The total expenditure is equal to the national income, which is equivalent to the national
output.
Therefore, effective demand is equal to total expenditure as well as national income and
national output.
The theory of Keynes was against the belief of classical economists that the market forces in
capitalist economy adjust themselves to attain equilibrium. He has criticized classical theory
of employment in his book. Vie General Theory of Employment, Interest and Money. Keynes
not only criticized classical economists, but also advocated his own theory of employment.
ADVERTISEMENTS:
His theory was followed by several modern economists. Keynes book was published post-
Great Depression period. The Great Depression had proved that market forces cannot attain
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equilibrium themselves; they need an external support for achieving it. This became a major
reason for accepting the Keynes view of employment.
The Keynes theory of employment was based on the view of the short run. In the short run,
he assumed that the factors of production, such as capital goods, supply of labor, technology,
and efficiency of labor, remain unchanged while determining the level of employment.
Therefore, according to Keynes, level of employment is dependent on national income and
output.The Keynesian theory of employment states that the cause of
unemployment is the deficiency of effective demand, and unemployment can be
removed by raising effective demand. With the increase in effective demand,
the production in the economy goes up.Keynes's General Theory shows that a
situation of full employment is not the natural outcome of market forces in
economies that are subject to change. Rather, there is a wide range of
possible equilibrium situations, with differing degrees of unemployment
Keynesian theory of employment is based on the following assumptions:
i He carries out his analysis in the closed economy, ignoring the effect of foreign trade.
(iii) He assumes the operation of the law of diminishing returns or increasing costs.
The liquidity preference theory of Keynes states the relationship between interest rate,
liquidity preferences, and the quantity or supply of money. It explains the preference for
money or liquidity and the reason to demand and get a high-interest rate for long-term
financial assets.
The founder of Keynesian economics and the father of modern macroeconomics, John
Maynard Keynes popularized this concept in his book- The General Theory of Employment,
Interest, and Money (1936), explaining the liquidity preference framework analyzing the
determination of equilibrium interest rate based on the supply of and demand for money.
The liquidity preference theory of interest was introduced by the father of modern
macroeconomics, John Maynard Keynes, in his book The General Theory of Employment,
Interest, and Money (1936).
The theory focuses on the interest rate, liquidity preferences, and the quantity or supply of
money. It explains the association of higher interest rates with long-term instruments.
The theory explains people’s motives to prefer holding cash rather than investing in interest-
bearing securities. The three motives explained by the model are transaction, precautionary
and speculative motives.
Transactions Motive
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It highlights the people’s choice to prefer liquidity for their day-to-day expenses or normal
transactions.The amount of liquidity is directly proportional to the income
level.
Precautionary Motive
Cash plays an important role in everyone’s life, specifically in times of crisis and
emergencies. Precautionary demand reflects the need to cover abrupt expenditures,
contingencies, or unforeseen opportunities.
Speculative Motive
Speculative motive explains people’s intention to gain speculative profit utilizing changes in
interest rates. If the interest rate is low or investors may have a higher demand for liquidity,
anticipating a future increase in interest rates, they hold cash for future investment.
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.
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- Creating source for income
- Create awareness of financial, procurement, and property legal framework for user
Achieve the above mentione dmissions,visions,values and objectives of Samara univerisity Finance
and Economic development Office has been organized structurally intosix (6)
departments.Theseare:-
This system enables organization in team work among the employers for all decision made
with the managerial hierarch.
Purchasing &
property Human resource
Administration Administration
process owner
This indicate that the plan and budget preparation team provides budget and for each kebeles
and sectors based on proposal and transfers to monitoring and evaluation case team, after this
budget and plan transfer to the data documentation of the organization case team based on
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plan and budget conduct market research and finance required amount of budget by financing
case team and undertake purchasing activities, finally auditing and their activities
Based on government economic policy it set short term and long term plan of
the organization.
1.4.1 Mission
Growth work to insure fast and sustainable development
Practice saving to resource usage
To implement the policies and strategies of the government
1.4.2 Vision
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To sustain socio-economy development
Ability to manage the wealth of the region
Equal participation of development
1.4. 3Values
CHAPTER TWO:
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2. SWOT ANYLYSIS
- Lack of infrastructure
- population participation may be low Resources are not used for intended purpose
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CHAPTER THREE
3.1.ACTIVITY UNDERTAKEN DURING FIELDATTACHMENT
I have done me practical attachment in finance office which is one of that established at the
time when the office exists. Under SU Finance office, the department of finance office was
established in 1999 E.C. the finance office has been undertaking a lot of activities since its
establishment through coordinating the skilled human power, financial resources, and non-
financial resources of the organization well.
I would like to say the perform well in the finance office. Most of the time the financ
fficeevaluates its employees according to the rule and regulation of the organization.
EXPERIENCE
Good relationship with other office
Wisely utilization of resources
SKILS
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CHAPETR FIVE CONCLUSION AND RECOMMENDATION
5.1Conclusion
samara unviresty finance and economic Development office were established
1999 E.C by holding it’s mission, vision, objective and it has been organized
structural in Afar regional state .Initially it established total employees have
26 finance and economic development office have those employees 13 are
female and employees 13 are male employees . The Organization was
established for the purposes of withdraw and expenditures habit of the
Samara university society .The organization has its own strength, weakness as well
as opportunity and treat that may improve or hinder organization in different aspects.
practical attachment in finance office which is one of that established at the time
The paper or report also contains about SWOT analysis of the organization. More or less I
have tried to show and list the strength, weakness, opportunity, and threat of Samara finance
and economic development office.
5.2 Recommendation
Doing activities by up on my practical attachment given for me by University college of
Business and Economics department of Economics ,then I accept the request and I was
doing in Samara university finance and economic development office Increasing skilled
man power by creating opportunities trained higher educational level, The organization
must accurate rule and regulation to client, Preparing clear and precise guideline for all
departments, Create good relationship with managers and employees, The organization
should be building enough room to minimize employee over crudeness.
The organization should hire the employee based on recruitment .
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Reference
Interview with institution manager
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