Economics Essays (Examples)

Economics

Define economics

Economics is defined as the study of how society allocates limited resources and goods (Encyclopedia Britannica, 2009). esources include inputs such as labor, capital, and land and are used to produce goods. Goods include products such as food and clothing, as well as services such as those of barbers, doctors, and firefighters. Often goods and resources are deemed scarce because of society's demand for them vs. their availability (Stapleford, 2012). Economics, then, becomes the study of how goods and resources are allocated when scarce. It also allows us to anticipate the outcomes of changes in governmental policies, company practices, or population shifts, and so forth.

The market system is one avenue economists use to allocate scarce resources. A market is defined as any system or arrangement where trade takes place (Encyclopedia Britannica, 2009). In the U.S. there are several markets trading at all times. The study of…

Economics

The production possibilities curve represents the maximum level at which a country can produce. Freer trade, such as what the EU has promoted since its inception, allows countries to do two things. The first is that it allows them to produce at their production possibilities curve. This occurs because the country under free trade conditions is going to produce those goods in which it has a comparative advantage. This improves the efficiency of production because the country is producing goods at which it is better at producing, and as it produces more of those goods than it otherwise would the country will also have better economies of scale. A country will produce at a higher level of efficiency after free trade than it did before, bringing it closer to the production possibilities curve.

The other thing that happens under free trade is that the production possibilities curve is that…

Economic Principles and Purchasing a House

Economics Principles and Purchasing a House

This essay discusses principles of economics as they apply to making decisions about purchasing a home. The essay also reviews the decision making process and how it is affected by marginal benefits and marginal costs. The health of the economy and also international trade are factors to think about too, along with looking at conditions which could have lead to making a different decision.

Supply and Demand

Buying a home is one of the single most important economic decisions that most people make. Because it is such a big decision, it is important to look at all the right considerations. The way to do this is to understand how economic principles apply. One principle that affected my decision was the law of supply and demand.

The number of homes available for sale is influenced by supply and demand.…

Economics: Application of Concepts

An Analysis of the Economic Situation in the U.S.

In the last five years, we have seen the U.S. economy expand but at a pace that is seen as being relatively moderate. In conducting an analysis of the current economic situation in the U.S., I will largely limit myself to inflation, interest rates, and unemployment.

Although the current economic situation is better than it was five years ago, there are signs of uncertainty that continue to suppress economic activity. This is more so the case taking into consideration the prevailing unemployment rates. For the most part of year 2008, the unemployment rate was stuck between 5% and 6% (Bureau of Labor Statistics, 2013). As at January this year, the nation's unemployment rate stood at 7.9% (Bureau of Labor Statistics, 2013). This is an indication that in comparison to five years ago, the total unemployed labor force…

Economics of Alcohol Abuse

Econcs Of Drugs & Alcohol

How an Economist Might Approach Alcohol Abuse

One answer would be to raise price by decree. Holding all other factors the same, this artificial price increase would initially reduce quantity consumed, but there would still be demand that went unfulfilled, which implies foregone profit at the new lower quantity and higher shelf price. Were supply restricted, say through a fixed number of licenses, this triangle would represent profits producers would want to capture but could not under the artificially high price. Were the price rise caused by say input costs, in the long run producers who could achieve economies of scale would increase production, so price would fall back to the original at higher quantity (Chen, 2007, p. 1), but this would be impossible were supply artificially limited, and if the profits were taxed away there would be no incentive to…

Economics

economy has recently emerged from recession. During 2009, real GDP declined 2.6%, the largest drop during the study period beginning in 2009. This came following flatlined GDP in 2008. The only similar instance on record was in the early 1980s when GDP declined 0.3% in 1980, rebounded slightly and then declined again in 1982 by 1.9% (BEA, 2011). The most recent recession was, because there was no rebound in the middle and because it was deeper in intensity, the most serious decline in economic output in the last thirty years. hereas the recovery post-1982 was strong (4.5% growth in '83 and 7.2% growth in '84) this has not been the case now (2.9% growth in 2010 and forecasts for 2011 are not much better). The unemployment situation at present roughly mirrors that of the early 1980s recession. During that recession, unemployment moved to 9.7% in 1982 and 9.6% in…

Economics

Jim Hargrove, CEO

Excess inventory

Neptune has over 60 days' worth of inventory and is faced with some interesting solutions to address this issue. This memo will analyze the issue and the proposals put forth by the management team. The memo will conclude with a recommendation for action.

New fishing rules and new technology investments have allowed Neptune to take bigger catches. Despite record sales, the company is still accumulating inventory. There are two proposals on the table for addressing the inventory issue: launching a budget brand and decreasing fleet size.

Analysis of Underlying Issues: The solution should reflect the underlying problem. The company has increased its fleet with new additions. This increase in capacity is permanent. The government's new regulations are also pushing us into richer fishing grounds, again representing a permanent increase in capacity. Other firms in the industry are also facing a long-term increase in capacity.…

Economics a Powerful Determinant ate Direction

Economics and entrepreneurship play significant roles in carrying out social change. The two are effective tools to change the economic fates of the unfortunates. Social change is defined as 'the structural transformation of political, social and economic systems and institutions to create a more equitable and just society' (fundforsouth). Social change organizations are described as an alliance of people working jointly for a cause sometimes challenging service providers, institutions and government agencies through activism. But it's hard to implement change without the funds that are sometimes controlled by the chosen few such as in the case of World Bank and World Trade Organizations. On the other hand, there are entrepreneurs who are up to provide change through their humanitarian deeds, such as the entrepreneurs who are in the business not just for profit but for their advocacy.

These entrepreneurs' main objective is to make…

Economics

The situation in the European air cargo industry bears many hallmarks of a cartel, and this was the finding of the European Commission. The OECD (2002) defines a cartel as "a formal agreement among firms in an oligopolistic industry…on matters such as price, total industry output, market shares, allocation of customers, allocation of territories, bid-rigging, division of profits or the establishment of common sales agencies." The main difference between this definition and the behavior of the airlines in question is that the industry is not oligopolistic in the true sense of the word. In an oligopoly, there are only handful of industry players, so any such collusion as indicated in the definition of a cartel would serve to disrupt market forces to the benefit of the companies within the oligopoly. In air freight, however, the prevailing market condition was that of monopolistic competition. This makes is harder to prove…

Economics of Monopoly Power

Take a position regarding whether the current initiatives of the FCC actually encourage competition in all communication markets and protect the public. Provide specific examples to support your response.

The FCC has over the years been involved in various initiatives to ensure that there is fairer play and a leveled field for the operation of the communication companies in the U.S.A. Though some may point fingers that the FCC has played lip service to the idea of encouraging competition for long, it is apparent that several efforts by the FCC has ensured a more competitive environment especially in the broadband provision.

The reason why the U.S.A. lags behind many countries in the broadband aspect in particular is the fact that there is a stunning lack of competition in this market. It is noticeable that there are a few players who dominate the market and all the…

The moral of the story is that even though sticky prices are in no one's interest, prices can be sticky simply because price setters expect them to be" (para. 18). This real life scenario is what Wolfgang Munchau suggests is leading to the global economic crisis. Munchau argues that the world leaders' failure to act has resulted in a global coordination failure, and the global recession that is currently in full force. Indeed, Munchau says, "Not one of [the London summit's] resolutions move the world a small step closer to resolving the global economic crisis" (para. 1). The reason for this, according to Munchau, is because they have waited to make crucial decisions, decisions that they are still waiting to make (para. 1).

Munchau's argument offers a commentary on why some consider governments a part of the coordination failure problem instead of the solution. Governments, at least democratic ones, are…

" (Kee, 2001, p. 139)

To further this discussion of short- and long-term production and cost one must at least briefly understand the just-in-time model. This model was developed by the Toyota Motor Corporation to mirror the ability of certain suppliers to provide just the amount of a product that a market demanded at the time it was demanded. To apply this model to manufacturing one must have a careful set up for short- and long-term goals of production, and potentially this model can effect short run production and be ignored by cost cutting that attempts to buy raw materials in bulk to meet the demand of a bottleneck in the early life of a product. (Ohno, 1988, pp.26-33) Just-in-time has become a goal of many in manufacturing, as they seek to carefully organize short-term and long-term production and cost issues. In the short-term, procurement is lower and waste is…

Economics

The English premier league has a large television audience and inspires a large amount of devotion among fans that might not have the interest of the sporting world. The English premier league is well-known from London, to other parts of the world.it is very hard to find someone who does not have a favorite football team within the English premier league. Despite all this the we4alth that has come with the famous competitions does not go down to the fans. For instance the lucrative TV deals do not trickle down to the fans. There exists a situation that is very troubling when it comes to the ticket prices. The ticket prices a have gone so high such that even the most loyal fans are no longer able to afford them. For example a ticket for an Arsenal match costs a whooping 126 pounds and there are instance it can…

We analyze the economy's productivity by calculating the Gross National Product, which is "the market value of the sum of all the goods and services produced in the economy." The economy's productivity should have a constantly growing figure in order to ensure the fact that that country is currently developing at its fullest potential.

The fiscal policy is the "means by which a government adjusts its levels of spending in order to monitor and influence a nation's economy." It comes together with the monetary policy by which a central bank controls a nation's capital supply. Fiscal and monetary policies are used in different arrangements in an attempt to direct a state's economic objectives.

Global Economic Growth and Development is the global raise in value of the commodities and services manufactured by an economy. In economics, the terms "economic growth" or "economic growth theory" usually refer to augmentation of "potential output,…

Even searching the Internet for information has a cost, the opportunity cost of one's time. Thus, one will consider the cost of obtaining information before seeking it out to make a decision.

The remaining three assumptions of the economic way of thinking deal with the notions of time, personal preferences and predictability. Assumption six makes the point that there are short-run effects and long-run effects for any decision that ought to be considered. For instance, a tariff may increase employment and income in an industry in the short-run, but consumers will decrease their spending on other products in the long-run. Assumption six states the value of a good is subjective and preferences will, therefore, differ between individuals. The final assumption of the economic way of thinking asserts that the test of a theory's validity is its ability to predict how the real world operates. Thus, theory's with greater validity should…

Economics

In basic terms, microeconomics and macroeconomics are both branches of economics. While one concerns itself with economic decisions undertaken at the household or individual level, the other explores the functioning of the economy in overall terms. In this discussion, I take into consideration the key differences between these two branches of economics. In so doing, I will give an example of each phenomenon and later highlight decisions made under both the microeconomic and macroeconomic context.

The Key/Main Differences between Microeconomics and Macroeconomics

Derived from the word "micros" which is essentially a Greek name for "small," microeconomics' primary focus remains on small individual groups or units. Derived from the word "macros" which is a Greek term literally taken to mean "large" or "long," macroeconomics concentrates on the analysis of the aggregate economy (Mishra, 2010). According to Miles and Scott (2005), the primary concern of microeconomics is the decisions a limited…

This negative motivation technique was mostly used in the 1930's, while nowadays it is rarely used.

Another advantage of unemployment is that it helps limiting an accelerated growth of the Gross Domestic Product (GDP) that cannot be supported for extremely long periods of time because of the resource constraints and environmental impacts also. If the employment rate is high, human resources are not used at their best capacity, which leads to wasting opportunities to produce goods and services, causing problems for the economy on a long-term.

Unemployment also encourages certain people to start their own business. Most of these people are former employees previously trapped in dead-end jobs with no future, that after being fired from their jobs found the courage and the motivation so start a business of their own. This way, many little companies are coming along quite nicely. These small companies create labor demand that is satisfied…

The Canadian government seeks to have a positive balance of payments with the United States. This is, in effect, a wealth transfer. Tracking the balance of payments vs. The exchange rate, we can see the impact of exchange rate shifts on the BOP. The Canadian balance of payments in 2004, when the exchange rate ranged from 1.17 to 1.37, was $29.8 billion. In 2008, when the exchange rate was between 0.97 and 1.29, the balance of payments was $8.1 billion. Tracked against the forex chart, the trend holds for the interim years as well -- when the Canadian dollar is strong, the balance of payments shrinks. This reflects the reduced competitiveness of Canadian goods in the U.S. market when the Canadian dollar's value is high. It also reflects the increased value of U.S. imports. In the U.S.-Canada trade relationship, however, there is an offset, which is oil. Increased strength in…

Economic Scenarios

Higher interest rates, more capital invested

During the 1980s, when President eagan was attempting to stimulate the economy, he radically lowered taxes. The U.S. was in the grips of 'stagflation,' or high unemployment and high inflation, a combination which historically is not supposed to occur together. The lower corporate taxes and lower taxes for wealthy individuals eventually encouraged more investment in business. "The Fed was resolved to stop inflation…[and] kept raising rates in 1980 and '81, eventually bringing both the economy and inflation to a standstill" (Solomon 2009). By the mid-80s, interest rates were still high, but investment capital in the economy had increased.

Lower interest rates, less capital invested

Low interest rates and low rates of capital invested in the economy are usually characteristic of a recession. This occurred very recently, during the Great ecession of 2008, when the Fed slashed interest rates to historically low levels…

Economics

Discuss the alternative theories to profit maximization ranging from perfect competition to strict monopolies and discuss how these two special conditions are theoretical limits

In economics, profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue -- total cost method relies on the fact that profit equals revenue minus cost, and the marginal revenue -- marginal cost method is based on the fact that total profit in a perfect market reaches its maximum point where marginal revenue equals marginal cost. Economists identify four basic types of markets based on the number of firms relative to the size of the market (The size of the market is determined by what the buyers believe to be good substitutes for a firm's product. For example, the market for long-distance calls is national:…

This situation is perfectly illustrated by the figures. As one may observe, as the units of produced goods increases, the number of units of produced services decreases. The maximum number of units of goods can be produced only if no units of services are produced at the same time.

A d) if the country's economy is producing on its production possibility frontier, the opportunity cost cannot be increased, it cannot be exploited in order to increase the production of goods and services. Therefore, in order to increase production, the country's production possibility frontier must be changed. This could take place by increasing the country's production capacity.

This situation can be influenced by quantities of available resources, on the one hand, and by technological progress, on the other hand. In our case, the situation is influenced by technological progress, which determines increased production with a given quantity of resources.

The dotted…

Economics and Market Competition

Companies influence and are influenced by market conditions. The competitiveness on the market, the supply and demand determine how companies develop their strategies. There are also other factors that determine their strategy, like market price, average revenue, and marginal revenue. The evolution of these factors and their influence on the market determine companies' behavior.

Market Price, Average evenue, and Marginal evenue

The market price is determined by supply and demand. When the supply of a certain product is high, its price is lower, and when the supply is low, this increases the product's price. In markets with high levels of supply there is usually intensified competition. When the demand for a certain product is high, the price tends to increase. In markets with reduced demand, the prices are lower, and the level of competition is reduced.

Marginal revenue is represented by the extra revenue gained when…

Economic Systems:

An economic system is basically described as specific set of principles that addresses the production, distribution, and consumption of products and services. The involved parties in the production, distribution, and consumptions processes are usually determined by or dependent on the economic system. Throughout the history of humanity, different types of economic systems have evolved because different societies have placed varying emphasis on distinctive goals and priorities as part of their efforts to obtain answers to certain economic questions. In addition, the difference in economic systems is fueled by the tendency by different societies to develop very broad economic approaches to manage their resources. One of the main reasons for the development of different economic systems is to address the challenge of scarcity. The challenge of scarcity is an essential problem that confronts individuals and nations. hile there are four major types of economic systems recognized by economists, there…

Economic Final Report

Types of economic systems

Economic systems vary from one nation to another. Traditional economic systems refer to an economic system founded by tradition. The services and goods that people provide through the work they do, how people exchange and use the resources are trends that follow permanent patterns. These are not dynamic economic systems because there are minimal changes. In this economic system, people live on static standards. They do not enjoy much occupational mobility and financial mobility (Gregory and Robert 19). However, it is possible to predict economic relationships and behaviors. People are aware of what they are expected to do, why they trade, they know what others should give to them. In traditional economic systems, the interests of the community are of great priority than individual interests. People collaborate at work and labor proceeds are shared equally. However, in some traditional economic systems, individuals respect…

Economic Crisis

The revelation of the financial crisis that unfolded in United States in 2008 is considered to be the worst economic crisis since the Great Depression, 1929. The distinctive causative factors that have contributed to the U.S. economic crisis 2008- 2009 are differentiated by aggravated financial control, higher risks in capital investment, the housing bubble phenomena in relation to the brisk credit expansion. The aggregation of these factors in the U.S. economy directed the economy towards the de- leverage and credit crunches as the bubble burst. The following paper shall be discussing about the degree of correlation between the tax implications policies with respect to the financial crisis in U.S.. The precise review of strong linkages between the taxation and economic crises is the explicit explanation of the crisis that shook America. The paper also highlights the key factors that demonstrated their abilities and rescued U.S. In the economic…

Economic Crisis Policies

US current economic crisis is considered to be started from real estate sector. The real sector started to decline in 2006 and it accelerated in 2007 and 2008. Housing prices have fallen from the peak from about 25% so far. The decline in prices left homeowners with no option and they were unable to refinance their mortgages and causes default of mortgages. This default of mortgages and loans swallowed the banks and financial markets such as falling of Lehman's brothers and other anks and blow to rest of economy happened as the whole economy was relying on banks and ultimately it slows down investment in the country and capital flows to other parts of the world like China and India. ank losses cause reduction of bank capital which in turn requires capital reduction thus saving bank from lending. It is estimated that every $100 loss and reduction…

If there is a risk that one of the family members will lose his or her job, that will add risk to the purchase decision. The riskier the purchase decision, the lower the price will need to be in order to compensate for that. Another factor here is the expected change in housing prices or interest rates. Buyers are inclined to enter the market if they believe that the cost of home ownership will be higher next year, but they may delay purchases if they believe that costs will be lower next year.

ith new home sales last summer, the dip could be in part due to worries about a double-dip recession. The summer was characterized by an inane fight over the debt ceiling, something that shattered confidence of many in the political system, and some of the key actors within that system. A fractured political system is one that…

Economics

Total revenue represents all the company income. Total revenue is calculated by multiplying the price of products with the quantity sold. Typically, total revenue is calculated as follows:

Total revenue = price x quantity

Where price (P) and quantity (Q).

Total revenue=PxQ

As being revealed in Table 1, total revenue is calculated by multiplying price with quantity, when firm produces 2 quantities of goods, firm's total revenue is $10, however, when a firm produces 3 quantities of goods, its total revenue is $15.

Marginal revenue is an additional revenue that a firm generates when a firm sells additional unit of output. The marginal revenue plays an important role in the perfectly competitive firm where a perfectly competitive firm maximizes its profit when marginal revenue is equal to marginal cost. The formula used to calculate marginal revenue is:

Marginal revenue= Change in total revenue/Change quantity.

The average revenue is calculated…

(Buchanan, 72)

The economic policy tools that were employed just after the war subsequently underwent some changes. From 1947 to 1950 direct controls on wages and distribution were eliminated followed by removal of trade controls in 1958. However, the government continued to maintain its hold over prices and credit distribution which made it different from many of its neighboring states in the postwar period. The French Ministry of Finance exerted greater control over the economy than the Bank of France. This led to a greater predilection to resort to devaluation when external equilibrium resulted due to the state failure to control incomes. In France, the period between 1945 and 1975 was known as the "thirty glorious years" because of the phenomenal economic performance. During this period, the average growth rate of GDP was around 6.8% which was quite remarkable considering that Britain's average GDP growth rate was 2.4% and Germany's…

He would be faced with deciding whether he must spend all his available resources on goods or services, or whether he must save some of his income so that he would be able to finance some of his needs of his future. When he is taken as a labor resource, he must make the decision whether he must use his time in working for his pay, or whether he must spend it on sleeping and other leisure time activities. ("Decision making using marginal analysis," n. d.)

Similarly, when he is a labor resource, he must decide how much of his time he must spend on education, so that he may be able to maximize his life earnings. On the other hand, if he were an entrepreneur, then he must make the decision on how many people he must hire, or how much he must spend on acquiring a new product…

The need for the preservation of these resources is because of the fact that it is finite or limited. Abused utilization of these resources will deplete it and will eventually endanger the future inhabitants of the earth, leaving them nothing for the production of their own needs. Without the resources, there will be nothing to work on in the first place. Achievement of economic stability is the first step in order to achieve the other social goals. Since there are resources, there can be economic efficiency whereby goods can be produced at a lowest possible cost because of the availability of resources. Economic freedom or the right of a man to engage in voluntary economic activities, economic equity or justice particularly in terms of taxation and welfare economics, and economic security or security in employment can be settled between the government and the people in order to achieve them. All…

Economic Depression of Europe

An economic depression is more severe than a recession due to the fact that a depression involves drastic decline in a national or international economy, characterized by decreasing business activity, falling prices, and high levels of unemployment.

There were economic depressions in Europe that were experienced before and after the 1870 but with a remarkable difference, being that those that were experienced before the 1870s were less costly in terms of life and resources and took relatively lesser period. Indeed it was a commonplace that every part of Europe experienced one sort of economic depression or the other.

One such economic situation before 1870 was the "little ice age" which began in the late 16th century till around 1950s as indicated by Big Site of History (2011). This was a time when a severe cold that could not be withstood by most crops set in most…

Economic Challenges Canada Faces

In recent years, the challenging economic condition in Canada has emerged as a concern for citizens, policy makers and the government alike. Canada faces challenges in terms of creating a more innovative society, as the country continues to experience a significant productivity gap compared to other advanced industrial economies. The Canadian industry appears to be slower in successfully developing, applying and marketing innovative products, processes and services than a majority of other nations. This lack of innovation is the cause of Canada's low productivity growth and competitiveness, and therefore must be addressed in order to increase employment growth, a higher standard of living and an improved quality of life for all Canadians.

Current research predicts that although Canada's economic performance will gradually strengthen out of the recent mild slowdown into a better pattern of growth in 2004, Canada's economy still faces the longer-term challenge of increasing…

Economic Environment of a Business

The objective of this work is to summarize the economic environment of a business including information relating to microeconomics, macroeconomics, and international trade aspects

The business organization is a "micro-economic unit" and the business environment is that which makes provision of the "macro-economic context within which firm operates." (eddy, ) The business environment can be categorized into the 'economic' and non-economic' and the 'micro- and macro-environment. (eddy,, paraphrased) The firm is an economic institution in a market system with the behavior of the firm reflecting the result of the decisions that were economic in nature that the manager of the firm made.

The economic environment of a business in today's globalized business society is complex in nature. There is an inherent link between the business sector and it relationship with the government, capital market, household sector and the international business sector -- all of which…

Economic Events: 1980-1989

the decade of greed. The era of onald eagan when the rich got richer and the poor got poorer. Despite this common wisdom, 1980 started off auspiciously. On May 8, 1980 the World Health Organization hailed "one of the century's greatest medical accomplishments," the final and total eradication of smallpox (Dickson 247). But how quickly times change - barely a quarter century has passed and this same disease is making headlines once again.

Attitudes change also. While many in this day and age would still agree that the 1980's was a selfish period in American history, a sea-change has occurred in the rhetoric issuing forth from Washington D.C. In a very fundamental way, party politics has been thrust aside as concerns for homeland security take precedence over petty partisanship. Michael Barone notes this in his analysis of a speech made by Democrat ichard Gephardt in the Summer…

4. The role that the FDA plays in setting food safety requirements is inherently costly to the economy. The function is not based on economic concerns but rather public health concerns -- the FDA's mandate dates to Congressional concern about the Elixir sulfanilamide disaster and traces its roots to Upton Sinclair's The Jungle, which documented meat production in Chicago at the turn of the 20th century (FDA.gov, 2009). Thus, decisions about FDA regulations are not made on the basis of economic good, but rather public good. Increased regulations would impose increased costs on business. In classical economics, these costs would act as a form of tax, increasing risk and discouraging investment. Eliminating these requirements would lower these costs, which would allow for an expansion of the food business. It could be argued that the threat of litigation today would counterbalance the need for regulations, but that claim has not been…

S. The societal system practiced in France serves as a model towards which the U.S. aspire.

President Barack Obama's healthcare reform plan is considered by many as being a socialist experiment that will significantly hurt the economy (CBS, 2009). In opposition, the President has stated that he does not intend to implement a healthcare system that depends on the government. Instead, he would prefer a system in which the government competes with private insurance companies for selling coverage.

The Invisible Hand Principle

The invisible hand principle was developed as an opposition to the protectionist system. This principle is actually a metaphor describing the self-regulating characteristic of the market. In other words, such a system can be implemented due to a combination of factors, like self-interest, competition, supply and demand. Adam Smith, who developed this theory, considered that the action of these forces and their effects are able to allocate resources…

Thus, a region or nation experiencing economic depression will be unable to use the interest rate lever to boost the economy. Similarly a country with high inflation will be unable to independently raise interest rates to contain inflation. Moreover, Islamic countries, which form a large part of the geography, do not believe in interest rates.

Political barriers -- Political differences between nations make it extremely difficult for them to adopt a common currency. It can lead to a loss in political sovereignty as monetary interests would need to surpass political interests. This is unlikely to be acceptable to most of the nations and the idea of a single currency may be difficult to implement (Gimp, 2008).

Will Pros and Cons change Over Time? Depending On the Country?

The economic conditions to determine a monetary union depend on: the openness and size of the economy involved to trade; the free movements…

Two alternative solutions are available. The first sees that the U.S. federal authority uses the budget allocated to support the development of the national industries, without raising barriers to imports. The second possible solution is for the United States to strive to increase its exports by focusing more on international operations.

Criteria / goals

The evaluation criteria for the proposed solutions revolve around the benefits they generate, as well as the costs they imply. Otherwise put, the decision will be made in accordance with the arguments in favour and against each of the two alternatives, and by the solution's ability to meet the established goals. These goals include the insurance of economic stability within the United States (for all population, corporations and the entire system), the maintenance or even development of international relations, as well as the sustained development of the domestic industries.

Evaluation of alternatives

Alternative 1:

Pro: does…

These decisions necessarily entail that some potentially productive opportunities are sacrificed in order to make what is estimated as the most productive choice.

Supply and demand refer to specific products and services, the ability to provide these, and the level at which they are desired by the target market. uyers desire a product or services, and therefore demand a certain quantity of these at a certain price. The relationship between the price and quantity of desirability is the demand relationship. Supply is the actual quantity of the product or service that the market can provide. The concept of supply relationship is the correlation between supply and the price received by the supplier, who is willing to supply a certain amount of products at the price received.

The dynamic in the relationship between demand and supply has a direct influence on the efficient allocation of resources within an economy, as well…

Energy costs increased substantially and the yen's exchange rate was shifted to a floating rate. The eventual recession reduced expectations of future growth and reduced private investment. Economic growth went down from 10% to 3.6% during the period 1974-79 and to 4.4% in the decade of the 80s. ut despite the oil crisis and its consequences, Japan's major export industries stayed competitive through its cost-cutting policy and increasing efficiency. It reduced industrial energy demands and allowed the automobile industry, along with other industries, to improve. y the late 70s, the computer, semiconductor and other technology and information-intensive industries entered a period of rapid growth. During this high-growth era, exports continued to support Japan's robust economic growth in the 70s and in the 80s. However, the problems encountered on account of its growing balance of payments surplus urged for the opening of domestic markets and a stronger focus on domestic demands…

Economics

There are a number of different metrics that can help to measure the health of an economy. The GDP is one of those numbers, and can be obtained from the Bureau of Economic Analysis. Following a decline of 2.6% in 2009, the GDP grew in 2010 by 2.9%. GDP rates fluctuated by quarter, with a low of 1.7% in Q2 following by escalating growth in the last two quarters. This represents a slow recovery from the steep declines of 2008-2009. Another measure of economic health is unemployment. The current unemployment rate from the Bureau of Labor Statistics is 9.0%, a decline of 0.4 percentage points from December. This rate is historically high, it is lower than at any point in the past year, again showing a sign of slow recovery. A third measure of economic health can be found in the inflation rate. The best measure of inflation is…

Producers do not want to produce too much, lest there be waste. Consumers do not want to spend too much, because their resources (for most people anyway) are inherently scarce.

Hayek makes the point about there being different types of knowledge. In his free market economy free from centralized planning, he argues that each individual has different knowledge -- each specializes. This allows the millions of people who are making economic decisions to have the ability to gather and process as much information as possible. ith more information, better decisions are made. By delegating decision-making to millions of economic actors, each operating within their own specific area of expertise, decisions are going to be better. They will be based on more information and more specialized knowledge to interpret that information.

He argues that economic planning inherently must be based on cycles, such that there is day-to-day adjustments. Such a situation…

Unfortunately most growth oriented economic policies such as "supply-side" economic policies tend to exacerbate inequality. A greater role of the government in the economy such as increased taxation on the rich can reduce inequality. Inflation and unemployment are usually inversely proportional in most economies, i.e., increase of money supply through deficit financing reduces unemployment but increases inflation while tight monetary policies reduce inflation but increase unemployment. According to a number of analysts, a major cause of terrorism in the world is an acute sense of deprivation among a large section of the population. Economic measures can, arguably prove more effective in rooting out terrorism than military action.

Part C-Theory

What, How and for Whom to Produce:

In 'free market economies' decentralized decision making by individuals and firms based on consumers' desires (which determine the price of goods) and the profit motive determine what goods are produced and in what quantities.…

Economics Course

Economics impacts on many areas of life subsequently it will impact on many areas of professional life. eflecting on the lessons learned, including the knowledge and skills gained, the real value is in the way that economics concepts can be applied to the real world; not only to explain event that are seen in the macro-environment, but to guide the way personal decisions will be made with that knowledge.

The first indicator of the lessons and concepts taught in the class being absorbed and developing into transferable knowledge has emerged with an increased understanding of the way that the economy operates and the influences which are present in the economy that are driving up prices.

There are many examples of the economic concepts; one example is the way that supply and demand has impacted on oil prices which has had a knock on effect in the economy as…

Economics

Most particularly, I discuss the economic concept of demand and supply and the determinants of both supply and demand. Further, I also discuss in significant detail the meaning of economic indicators as well as monetary and fiscal policy.

Demand and Supply

Supply and demand are considered some of economics' most fundamental concepts. Indeed, they underlie almost every transaction in a market economy. In basic terms, demand according to Boyes and Melvin (2012), is "the amount of a product that people are willing and able to purchase at each possible price during a given period of time…" On the other hand, supply as Boyes and Melvin (2012) point out can be described as "the amount of a good or service that producers are willing and able to offer for sale at each possible price during a period of time…" It is the interrelation between these two important economic concepts that…

Economics of International Trade China

Exploring the Economics of International Trade: China

"Chinese international trade has experienced rapid expansion together with its dramatic economic growth which has made the country to target the world as its market," and its expansion has only continued to show powerful growth within the international economic marketplace (Sun & Heshmati, 2010, p 1). After China was reopened to trading with the West in 1978, the country has really took off in becoming one of the world's biggest producers and exporters of a plethora of different goods. China has grown tremendously as nations like the United States have become their biggest trading partners. In response, China has helped refuel this growth with the manipulation of their currency and their heavy investment in the U.S. dollar, which ensures them a more competitive position for their exports.

For generations, China had closed itself off to trading and interacting…

Economic Value Added (EVA) Accounting Practice

Although Economic Value Added (EVA) is not a new concept in economics and financial theory and is based on the 19th century concept of "economic profit," it has only been widely adopted recently by business firms as an accounting practice. In this paper we shall describe what EVA is, and look at its pros and cons from the point-of-view of the company adopting the practice and the investors. We shall also discuss how EVA differs from some other emerging accounting practices and the major issues relating to EVA as compared to other commonly used accounting principles. Finally, the possible problems and opportunities that a company adopting EVA principles can face shall be examined.

What is Economic Value Added (EVA)?

Economic Value Added (EVA) is the after-tax cash flow generated by a business minus the cost of the capital it has invested to generate that…

This program is focused onto the following directions:

Generating stability with exchange rates

ebuilding confidence in the monetary policy

Better managing and restricting public debt

eforming and restructuring the banking sector to insure more transparency and the implementation of internationally recognized policies (The Icelandic Government Information Center, 2008).

4. Short-term forecast for the economy

The 2008 has severely impacted the Icelandic economy. In light of the dramatic effects as well as the efforts put into the reconstruction and reconsolidation of the Islanding economy, major growths are not expected. In other words, it is generally assumed that the country will regain its stability through small and gradual victories, which will, for the time being, only manage to stabilize the economy. Growth rates are expected to remain low and for 2010 for instance, the growth rate of the gross domestic product is expected to be close to zero (Central Intelligence Agency, 2010).…

Meanwhile, Dwight R. Lee (writing in The Independent Review, 2001) points to a situation where a powerful environmental group (Audubon Society) has cooperated with an energy company and both have profited. Free market environmentalism has shown the way for profits and preservation at the same time in this case. The Audubon Society (AS) owns the 26,000-acre Rainey Sanctuary in the swamps of Louisiana, and while the group is opposed to oil drilling and gas drilling in 99 out of 100 cases, the AS has "been willing to accommodate the interests of those whose priorities are different" (Lee, p. 219). Those interests include allowing thirty-seven wells to be exploited for oil and gas in the Rainey Sanctuary.

According to Lee, the AS has received royalties of more than $25 million from those 37 wells, and in the meantime the technology used in the oil and gas development has prevented any spills…

Source: The Financial Forecast Center, 2009

Increases in unemployment rate mean that the gambling industry will be faced with fewer customers. This in turn will materialize in reduced sales and profits. If the situation continues to aggravate in the years to come, several players in the gambling industry might have to close their casinos. One must also notice the exceptional situations in which out of job individuals will gamble in the hope of winning some money. However, these instances are reduced and not able to modify the indirect relationship between the evolution of unemployment rate and demand for gambling services. Vice versa, when the unemployment rate decreases and the population enjoys more sources of revenues, the demand for the services of casino clubs increases.

2.3 Inflation rate (consumer price index)

The inflation rate represents the "percentage increase in the price of goods and services, usually annually" (Investor Words, 2009). Within…

When unemployment is high, companies may decide to delay the release of their new updated phone as a means to maximize profit. By withholding the release of the phone, not only does demand build but the ability of more consumers to enter into the market to purchase the phone does occur. At this point, the profit maximization curve peaks earlier and is likely to have a prolonged parabola at the top of the curve which is a short-term profit maximization curve.

With a low employment rate, the likelihood of the smart phone market to do very well is limited by the low employment rate and is subject to constraints when considering the smart phone market and the consumer's ability to pay.

Supply & Demand

Law of demand and substitutes how the demand of these phones are very high. Which again ties back to scarcity but how substitutes are so readily…

Interestingly, it seems that this feature remains relatively constant regardless of the level of the socioeconomic spectrum. That is fascinating to anybody who comes from a foreign community where Americans are envied and believed to be so much more fortunate than many of us in the rest of the world.

Finally, in that regard, I also anticipate that studying the ethical issues and legal concepts that apply to economic practices, including the intersection between the private business sectors and government. From my perspective, it seems that there are many potential areas of study just in the manner in which the consumerism mentality in the U.S. fueled the housing market bubble and the ways that big business interests profited from those impulses at the macro level while, in effect, destabilizing the entire national economy. Likewise, at the micro level, there is much to learn from the practices of individual lending institutions…

Economics

hile the U.S. is only showing the first signs of recovery from the global economic crisis, other nations such as Australia and China have recovered much more quickly. There are a number of factors that have contributed to the disparity in economic performance in the past three years in these different nations. In particular, three factors will be considered. The first is the situation in each country at the outset of the crisis. As the crisis was largely precipitated by a credit crunch, the differences between the structure and regulation of the banking sectors in each country will be given particular attention. The second factor will be the response on the part of each federal government to the crisis. The third factor will be the nature of the different economies -- the degree to which different structures have impacted the recovery process. Lastly, policy implications will be drawn for…

Economic crash can be viewed from a number of perspectives ranging from causes and effects to the 2008 Crash's resemblance to the Crash of 1929, which began the Great Depression. This paper will consider the 2008 recession from the standpoint of the financial banking industry, which, according to economic journalists like Matt Taibbi (2010), played a major and significant role in the crumbling of the nation's economy -- just like it did in the Lawless Decade also known as the oaring Twenties.

Big Banking Meets Big Government

What has now become known as the Era of De-egulation actually had its beginnings in the 80s decade known just as much for its rampant excess as the early 20s were known for their unbridled lawlessness. Yet, while the latter enjoyed the snubs-to-the-law bootlegging speakeasies, the former enjoyed the merging of the financial sector with the political -- which began during eagan's tenure…

Economics Major

First and foremost, I intend to major in Economics. From quite an early age, I have grown up admiring successful business leaders. I envisaged such individuals as living relatively fulfilling lives based on the wealth they had amassed from investments. One of my main personal heroes in business and investments has always been Benjamin Graham, an astute investor and economist who passed on in 1976. Graham who in my opinion remains one of the most rational investors of all time came up with some of the most priceless yet simple investment principles. Having developed a keen interest in the investments field at an early age, I have been an avid reader of any available literature on Ben Graham. Based on these readings, I remain convinced that to make sound investment decisions; the need for a well-founded understanding of economics cannot be overstated. Further, over time, I have come…

The national unemployment average was 7,591,000 in 2005. Therefore, an addition of 8,500 people would represent a.11% change in unemployment. Factor in additional domestic job losses from the closing of that company, and it is very possible that the closing of Pratt & Whitney would be enough to cause a reversal in the current trend, which is a decline in unemployment rates.

Connecticut's unemployment compensation would experience the most immediate and dramatic impact. For example, if all of Pratt & Whitney's employees are entitled to full unemployment benefits, then the first unemployment cycle for those employees would result in over $4 million in unemployment benefit payments. If all of those employees remain eligible for unemployment for the full benefit period, those payments would total over $104 million. Those estimates may be high, because not all employees would qualify for the full benefit payment or for the entire benefit period. In…

The nation will enforce law and order to protect its public property, regulate monetary frameworks and correct market failures. The government will be responsible for protecting private life of its citizens and property (Grant & Vidler, 2000).

Market and Competition Forces: the country's economy should be designed in such a way that it will promote competition. This is because competition means a fair deal in obtaining results. The government should increase sellers and buyers in the market because this would promote competition thus increasing the quality and efficiency. With competition, the country will be able to control and manage different functions of its economy (Grant & Vidler, 2000). Demand and supply are the prime market forces determining the production of a country produces and the suitable ways to do so.

Market equilibrium, price and output, are determined by market forces. Therefore, I would recommend that any least developed nation to…

Economic Influences

John Keynes is one of the most influential economists largely due to his theory of Keynesian economics, which dealt with his modern macro-economic policies (Skorburg, 2009). His work is linked to the Great Depression, partly because he advocated public and governmental spending to base national economies on. His most celebrated piece of literature is General Theory.

Adam Smith is the quintessential Age of Enlightenment economist who published Wealth of Nations in 1776, which posited the viewpoint that free enterprise and laissez faire policies would benefit the free market system.

People wouldn't ordinarily link Karl Marx to a free market system since he advocated the exact opposite of that, a form of communism that results in socialism, but his Communist Manifesto -- which presaged the ussian evolution -- inspired many free market communists to oppose his ideas.

Friedrich Von Hayek's theories, which are included in oad to Serfdom, his…

Economics

UK Economy

An analysis of the latest figures for key economic indicators and the factors which have affected these indicators. This should include the figures for unemployment, inflation and economic growth.

Unemployment

The unemployment rate is a very important indicator of the overall health of the economy. Currently the unemployment rate is at 7.8% (Office for National Statistics, 2012). However, this figure does not affect the population equally. Different segments of the population have different employment rates. Furthermore, the unemployment rate does not include people that are not actively seeking employment. In the chart these people are considered to be "inactive." Another interesting item listed in the report is that the unemployment rate for the youth demographic was falling due to a record number of 16 to 24-year-olds being enrolled in some type of educational program.

Employment in the UK has suffered from recession. In 2008 there was a…