ECONOMIC

INSTITUTIONS
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 ECONOMIC INTITUTIONS

• It refers to a network of commercial

organizations that determine how
goods and services are produced,
generated, distributed, and
purchased.
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 ECONOMIC INTITUTIONS

PRODUCERS MANUFACTURERS

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WHOLESALER RETAILERS
 The particular agencies or
foundations devoted to the gathering
or studying economic data, or
authorized with job of supplying a
good and service that is necessary to
the economy of the country.
FUNCTIONS OF
ECONOMIC
INSTITUTIONS
RECIPROCITY
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 FUNCTION OF ECONOMIC INTITUTIONS : RECIPROCITY

o It is the chain of giving, receiving and

repaying goods and services.
o In other words, it is defined as the system
of voluntary exchange between
individuals based on the understanding
that the giving of favor by one will be
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reciprocated either to the giver or
 ECONOMIC INTITUTIONS : RECIPROCITY

In Economics

It is defined as an exchange of
equal advantages.

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 TYPES OF
RECIPROCITY
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o Generalized

o Balanced

o Negative
 ECONOMIC INTITUTIONS : TYPES OF RECIPROCITY

Generalized Reciprocity

o Is giving something without the

anticipation of an instant return.

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 ECONOMIC INTITUTIONS : TYPES OF RECIPROCITY

Balanced Reciprocity

o Is giving out of something with the

anticipation of immediate return.

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 ECONOMIC INTITUTIONS : TYPES OF RECIPROCITY

Negative Reciprocity
o Occurs when the exchange of
something already involves taking
advantage of someone or the
situation. Most of the time, this
type of exchange involves
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TRANSFERS
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 ECONOMIC INTITUTIONS : TRANSFERS

o Government Transfer or
Transfer Payment are a
redistribution of income or
resources in the market system.
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o This are payments that are made
without any good or service being
received.
 ECONOMIC INTITUTIONS : TRANSFERS

EXAMPLES:

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 ECONOMIC INTITUTIONS : TRANSFERS

Resources are given with no

expectation of return:

o Financial aids
o Government Subsidies
o Social Security System
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REDISTRIBUTION
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 ECONOMIC INTITUTIONS : REDISTRIBUTION

It is the system of exchange which

involves the collection of goods by a
centralized authority to be distributed
among people.
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 It is also the process of transferring
income and wealth-be it in the form of
money, physical property, and the
like-from one individual to other
individuals.
 It is the act of the government to
distribute income from the wealthy
business and citezens to the less
wealthy.
 ECONOMIC INTITUTIONS : REDISTRIBUTION

Example:
• Pantawid Pamilyang Pilipino
Program (4Ps)

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 MARKET
TRANSACTIONS
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 ECONOMIC INTITUTIONS : MARKET TRANSACTIONS

o Also known as Financial

Transactions
o Buyers and sellers transact
economic goods and
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o System of exchange in
market. Goods and
services are traded and
bartered among