QUESTION 1. P5 and M2 P5. A) i. The economy is said to be ‘booming’ when demands for certain products and services rise. When demand rises, the prices will also increase. Increase in price can boost up the company’s profit. This enables companies to hire more workers thus increasing the numbers of employments. The increase in company’s profit also allows employers to raise the employees’ wages. When companies have more workers, they would be able to produce more products. Overtime, these outputs will then be sold to the people with jobs at a higher price because of the scarce amount of resources available. ii. The economy is said to be experiencing recession when demands for certain products and services shrink. When demand falls, the prices will also decrease. When this happens, companies will not be able to make a lot of profit. To survive in the industry, they needed to cut some of their staffs. During this period of time, the rate of unemployment is rising. When they do not have enough workers, the productions are not as numerous as during the ‘booming’ state. Because of the...
The Island of Mocha in the video is an example of a traditional economic system evolving into a market system. Every person plays a key role in this traditional system. They had fisherman, coconut collector, melon seller, lumberman, barber, doctor, preacher, brownies seller, and a chief. The Mochans got sick of trading goods all across the island just to get the things that they want or needed. The Chief decided that they would use clam shell for currency instead of trading.
Throughout history, many different types of economic models and theories have been developed. These different philosophies of business often were an important and integral part of a government’s basic structure. For example communist countries like China and the Soviet Union practiced a type of socialism. While, democratic nations like the United States and Canada practice forms of capitalism. Also within these economic models exists different theories as well such as Keynsian economics and laissez faire economics. To understand how these types of economies work in the world today, it is important to study and define a variety of economic systems. Researching such economic systems as capitalism and socialism, and also looking at the ideas of laissez faire and the Keynsian economics, a person will start to have a better understanding of how business works in the world today.
The fluctuations of economic growth are known as the business cycle. The GDP is a useful indication and measurement of the fluctuations of economic contractions. The measurement of GDP can be approached from three angles: value added by industry, final expenditures, and factor incomes (2008). The first angle measures the value added created by industry; the output less and inputs purchased from other producers. The second angle measures expenditures by consumers, businesses on investment goods, government on services and goods, and foreigners for exports; minus expenditures by domestic residents on imports. The last angle measures incomes generated in production, operating surplus generated by business and compensation of employees (2008). The GDP does not remai...
Classical economists such as, Jean Baptiste Say, Adam Smith, David Ricardo, and Thomas Robert Malthus, had a different view about the role of the government in a capitalistic society. The classical economists believed in a laissez-faire economy. They believed that the government should keep their hands off the nation’s economy. They felt that the market will be able to keep itself stable, without the intervention of the government. Jean Baptiste Say believed that supply would create its own demand. The classical economists had an assumption that the aggregate production of goods and services in the economy generate enough income to purchase all output. They also had the assumption that savings by the household sector matches investment expenditures on capital goods by the business sector.
Wildlife tourism has become a particularly popular trend over the years. Riding on elephants, taking pictures with lions, swimming with dolphins are only a few of the adventurous and thrilling activities that wildlife tourism provides. Even my own school is planning a trip to South Africa to participate in several of the enthralling ventures.
This paper will be a discussion of the current economic condition of the United States and this writer’s opinion on how it can be changed. Unemployment is high and needs to be reduced to full employment. We will explore the inflation rate, GDP growth and other factors of our current economic situation.
While reading chapter three of Poor Economics, by Abhijit Banerjee and Esther Duflo, the writers explore how health care is perceived in the poor communities and explain their perception of the ordeal. The term “low hanging fruit” is used throughout the chapter to describe a low cost health care (preventative medicines and cheap care). Some of the “low hanging fruits,” as described by Baerjee and Duflo, are bed nets implemented in regions affected by Malaria and ORS salt to treat diarrhea. These “low hanging fruits’” however, are not being used as much because the poor choose to turn to more expensive medications once they fall ill. For example, within the poor communities, people tend to shy away from vaccinations or choose not to complete them. Such vaccinations that are needed to protect the community. Another example of underutilization within the poor communities is the failure to use chlorine to disinfect water. Clean water is a major key- player in health.
Can a person’s worth be measured? Every person’s value or purpose in life is quantifiable by the economic worth of each individual. Those who are a burden to society by not being able to reach financial balance and must rely on others to provide and therefore are seen as dispensable. This is book argues that human life has no worth and we are only valued for what we can provide for those around us. Thus, those who can provide more to those around us are more successful in life. Within the book The Unit, a single person’s purpose and value in life is quantifiable to the economic worth of every other individual.
The main macroeconomic objectives of a government are price stability, full employment, economic growth and an equitable income of distribution. Price stability is a situation in which prices in an economy don't change much over time. Price stability would mean that an economy would not experience inflation or deflation. It is not common for an economy to have price stability of course, since there are always factors that are affecting it. Consumers and businesses alike must be able to trust that inflation is kept under control. Price stability means that one-year from now a Kuwaiti Dinar will buy roughly the same as it buys today. Strongly rising (inflation) or falling (deflation) prices lead to insecurity and will harm the economy. Hence price stability is a necessary requirement for a healthy economy. Rapidly rising prices ruins our purchasing power. People will start demanding higher wages. Companies will, in turn, factor the higher wages into the prices of their products. The result is a spiral with wages and prices pushing each other up and up while interest rates increase as well.
People need money to purchase all kinds of goods and services they needed every day and sometimes, for goods or services they desire to own. To fulfill that, they have the essential need to earn money. In order to earn money, they must work in either in fields related to their interests or to their qualifications. However, people will meet different challenges during their jobs-hunting sessions, such as many candidates competing for a job vacancy; salaries offered are lower than expected salaries and economic crisis or down which causes unemployment. Unemployment is what we will be looking into in this report. Dwidedi (2010) stated that unemployment is defined as not much job vacancies are available to fulfill the amount of people who want to work and can work according to the current pay they can get for a job they chose to work as. There are four major types of unemployment: frictional, structural, cyclical and seasonal unemployment.
Keynesian Economics is a "demand side" theory that was developed by British economist John Maynard Keynes in his attempt to understand the great depression. Keynes concluded that using government spending and lowering taxes would pull the global economy out of the great depression. Keynes argued that optimal economic performance can be achieved by influencing aggregate demand through activist policy and economic intervention by the government. Keynesian theory argues that any change in aggregate demand will have its greatest short term effect on real output and employment, not prices. Keynesians also believe that the short term effects may no infer on what the long term out may be. In the word of Keynes “In the long run, we are all dead,”.
In the world today, there are several different economic systems. Usually, the majority of countries will implement either a Capitalistic, Socialistic, Communistic, Traditional, or Mixed economy. Over the course of history, economists have studied several nations and the way they function. Certain systems are newer than others, and some are more successful than others.
The current state of the economy in the United States has been slow in recent months. While the economy is not currently in a recession, we may eventually fall victim to the first recession we’ve had in nearly ten years. The economy in general is showing growth, just not much. It will be difficult to predict what exactly will happen to the US economy in the future. Many economists do not agree on what will become of the economy. Some feel that we will begin a recession over the next year, and some feel that there is significant policy implementation that will allow us to dodge a recession and regain our economic strength. There are many factors that make up the US economy. The means in which I will discuss the overall growth and current status of the economy is by analyzing the Gross Domestic Product, and discuss the factors that cause it to rise and fall.
The economy tend to move from boom to recession, it is difficult for government to maintain and achieve macroeconomics objectives. At this time, there are “conflicts between government macroeconomic objectives”, which is this extended essay main theme. This essay will look at the government macroeconomic objectives, the conflicts between macroeconomics objectives, the best policy or mixture of policies to minimize the conflicts between macroeconomics objectives and recommendations, which are classified as main objectives and additional objectives.
Economics deals with efficiency the scarce resources are used and the opportunity costs involved .The choice can be between the overall costs vs. overall quality,, and the decision would be based on the opportunity cost of the situation, opportunity cost are concepts involved in almost every aspect of the economy and how it is affected is no different when it comes to the issue of recession. When these resources are limited, the producers should make decisions about how to handle the situation. They must change their business.