In the article "The Economy Needs More Big Government – Now" it is in the opinion of the author that the US Government step up and be more aggressive in their stance in stabilizing the economy and beefing up our health system. I agree with the article in the sense that before when the economy was stronger, the country basically ran itself. Now that the country has been crippled, I feel that the government should step up and act like a parent coming to rescue her injured child. The government has the means to revitalize the economy and to be the strong force that pushes along the recovery effort. By slashing interest rates and encouraging investors and restoring consumer confidence the economy can turn around. However, this is a bandaid that can only be applied by the US government. If ever before, now is the time that the economy does in fact need "more big government." In "Economic Trends" the first article discussed the weakening value of the US dollar across the globe. The downtrend on the value of the dollar will in turn weaken the overall global economy by dragging down consumption and investment overseas and potentially damage financial systems in other countries which rely on the US dollar as "safe" currency. Big exporters such as Japan and Germany will potentially find it hard to sell to American businesses and consumers since the falling dollar inevitably means higher prices for imports. Also, with the economy being so strong in the 1990s, many foreign companies issued debt in dollars. If the dollar falls, those bonds would all become much less valuable to the investors holding them and in turn much more of a problem for the global financial system. A second article featured in "Economic Trends" concerned increased domestic natural gas production....
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The economic system of the United States is modeled after the theory of capitalism. "Capitalism supports free enterprise - private business operating without government regulation (Janda 22)." The United States does regulate private businesses. Sometimes special circumstances arise which threaten to weaken the overall economic stability of the country. In order to sufficiently deal with these situations, the United States government has passed many laws granting certain groups the authority to bring attention to and to stop the threat. This is extremely important in terms of its effects on individuals. It protects the freedoms of individuals, maintains order and stability, and attempts to promote equality. One example of the ability of the United States government to interfere with the natural progression of the American capitalist society, is the existence of antitrust laws. These laws regulate certain actions of individuals, trusts, corps, and combinations of corps in an attempt to prevent or forcibly end a monopoly (Gilbert 21). Since 1989, Microsoft has been repeatedly accused of violating antitrust laws. Many times these accusations have led to an antitrust case being filed against Microsoft. These antitrust laws and law suits are extremely important. Despite the verdicts of the cases, antitrust laws served their purpose - to maintain the balance of the concepts of freedom, order, and equality. Freedom is one of the three main concepts that government must pursue for its people. Freedom has two main contexts in which it is used which are freedom of and freedom from. "Freedom of is the absence of constraints on behavior; it means freedom to do something (Janda 10)." These types of freedoms guarantee individuals certain liberties such as freedom of speech, freedom of religion, freedom of the press, and all other civil liberties. These individual liberties are extremely important in a democracy. "Freedom from...
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<b>Bush Endeavors to Help the American Economy</b> The votes are in and the people of the United States have spoken; President George W. Bush was reelected for his second term in office. In his first term he was concerned with the nation's economic growth and this concern remains consistent, if not stronger for his economic plans during his second term. Bush wants the economy to grow and create jobs by proposing tax cuts that will stay and help bring money back to America's economy. His aspirations for his new term will be effective because the economy is reviving with growth from his last term. Bush has helped the economy in the past four years, and there is no doubt that he will be able to continue to do so. He promised to build on the accomplishments of his first term by building a safer world and creating more hope for America for our workers, families, and children. Not only is Bush promoting tax cuts, he will not be satisfied until each and every American whom wants a job will be able to find one. With the job market growing, Bush wants businesses to grow too. Bush would like to continue economic recovery into prosperity in which the people will feel the effects of it now. By learning about Bush's proposed economic plans, one can see how his plans can be related to the subject of macroeconomics. A rising concern is America's debt. Bush came into presidency at a rough time. The September 11th attack put the economy in a huge deficit. Millions of dollars went into the necessary war with Iraq and the economy will be paying for it now and in the years to come. Bush wants to rebuild the economy. Money is being cut from our education, recently the California...
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Introduction Our understanding of how markets and businesses is an understanding based squarely upon the assumption of diminishing returns: products or companies that get ahead in a market eventually run into limitations, so that a predictable equilibrium of prices and market shares is reached. The theory was in rough measure valid for the bulk-processing, smokestack economy of Marshall's day. And it still thrives in today's economics textbooks. But steadily and continuously in this century, Western economies have undergone a transformation from bulk-material manufacturing to design and use of technology—from processing of resources to processing of information, from application of raw energy to application of ideas. As this shift has taken place, the underlying mechanisms that determine economic behavior have shifted from ones of diminishing to ones of increasing returns. Increasing returns are the tendency for that which is ahead to get farther ahead, for that which loses advantage to lose further advantage. They are mechanisms of positive feedback that operate—within markets, businesses, and industries—to reinforce that which gains success or aggravate that which suffers loss. Increasing returns generate not equilibrium but instability: If a product or a company or a technology—one of many competing in a market—gets ahead by chance or clever strategy, increasing returns can magnify this advantage, and the product or company or technology can go on to lock in the market. More than causing products to become standards, increasing returns cause businesses to work differently, and they stand many of our notions of how business operates on their head. Mechanisms of increasing returns exist alongside those of diminishing returns in all industries. But roughly peaking, diminishing returns hold sway in the traditional part of the economy—the processing industries. Increasing returns reign in the newer part—the knowledge-based industries. Modern economies have therefore become divided into two interrelated, intertwined parts—two worlds...
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Question 1 (a) 'The production possibilities frontier is the boundary between those combinations of goods and services that can be produced and those that cannot' (McTaggart, Findlay & Parkin, 2007). The PPF compares two products and a model economy is used where everything remains the same (ceteris paribus), i.e. production cost, demand and supply etc remain the same. Here is an example of a PPF using two goods, milk and steak. On the x-axis there is the amount of milk which can be produced in litres and on the y-axis there is the amount of steak which can be produced in kilograms. Each position on the PPF is efficient. It uses all the resources available. Any point within the area of the PPF is obtainable, but resources are being wasted. For example, if there are 10 cows that can either be used for producing milk or steak, and we milk one and slaughter the other, the other eight are out on the field eating grass not producing anything, i.e. we could be either milking them or slaughtering them. Any point outside of the PPF is unobtainable, as there are not enough resources available. The marginal cost is the cost of producing one more unit of it. The gradient of the PPF shows the marginal cost. As more steak is produced, the marginal cost of producing milk increases. That is, the more cows that we slaughter, the less milk we are able to produce. The marginal benefit is the benefit received from consuming one more unit of it. Marginal benefit is measured by the most that someone is willing to pay for another unit. As all points on the PPF are efficient, which one point on the PPF is more important than any other? It is the point where the resources are allocated efficiency, that is, we...
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Labour Issues in India - brief overview Absenteeism and Labour Turnover For many industries, lack of trained labour force is a problem. However, these problems are compounded by the fact that there are multitudes of unemployed potential labourers who, however, do not have the adequate skills for the job. Additionally, many do not also have the means to market themselves, or to make themselves available for jobs. Hence, lack of availability of labour is not merely a demand-supply problem, it has deeper socio-economic roots that need to be looked at from various perspectives. However, in many organized sectors where the demand for labour has been effectively met, absenteeism and huge turnover of labourers bring about their own problems. In many cases, absenteeism is prevalent in PSUs and government owned organizations. Causes are many, and include unionism, lack of ownership and participation, availability of alternate employment, misuse of benefits and remuneration and sometimes, lack of effective management control. Women Employee Problems Since time immemorial and despite the vast cultural and historical richness of our country, women are still considered less capable than men where labour is concerned. Of course, the reasons are cultural and socio-economic. Firstly, women are not considered physically fit for labour, and are often relegated to menial tasks. This deprives them of adequate compensation. Secondly, physical activity continues beyond working hours, in the household, depriving them of rest. A sacrificial mindset also makes them susceptible to malnutrition and poor health, which again affects their livelihood. Therefore, it is hard for women to actually come out of this vicious cycle in which they are trapped, simply because of their gender. The challenge is to change the mindset of a society which still sees women labourers more as beasts of burden. However, there has been some progress which has been achieved with active government and NGO...
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Macroeconomic Theory as it Relates to the Oil Crisis Essay Macroeconomics is the study of the economy as a whole, which includes inflation, unemployment, business cycles, and growth (Colander, 14). In today's society, Americans rely on having the option to have multiple service providers for their home or office. Several businesses especially those who work nationally or internationally with other businesses, try to find the inexpensive and new innovative ways to reduce cost. In take of the Recent Oil Crisis - Oil is the major source of energy worldwide and it is expected to remain so over the next few decades. As new technology is being developed our demand for oil is becoming crucial, oil is the major source of energy worldwide and it is expected to remain so over the next few decades. Crude oil has become the main "raw" material in every economy no matter if it has not developed or it is in the developing process. The changes in the prices of the crude oil are making positive and negative implications on every economy. When these changes of prices are severe ones, one might easily conclude that an economy is going to face problems such as unfavorable supply shocks, or according to the theory adverse supply shocks. When these kinds of problem arise in the world oil market, it is usually described as a world oil crisis. The world has witnessed two major oil crises and is facing an additional one at the moment. As in the two previous oil shocks in the world the same main problem still exists that the economy is faced during an oil crisis is the adverse supply shock. Adverse supply shocks are unexpected events that reduce aggregate supply and therefore the output decreases and prices increase. In the language of economy we call this...
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Define the concept of scarcity: Scarcity: The goods available are too few to satisfy individuals' desires. Scarcity is a central concept in economics. Resources are scarce if any individual would prefer to have more of that good or service than they already have. Most goods and services are scarce - those that are not are known as free goods. Where goods are scarce it is necessary for society to make choices as to how they are allocated and used. Economists study (among other things) how societies perform the optimal allocation of these resources. For example, we may all want to own gold jewelry. However, the amount of gold available is limited, so it is necessary to make choices as to how it is allocated. In a market economy, this is achieved by trade. Individuals trade resources between themselves to reallocate resources to where they are most wanted. In a smoothly operating market system, the rate of exchange between different resources or price will adjust so that demand is equal to supply. One of the roles of the economist is to discover the relationship between demand and supply and develop mechanisms (such as pricing, incentives, or penalties) to achieve an optimal outcome (in terms of consumer welfare) between supply and demand. "Substantives" economists and economic anthropologists have argued that "scarcity" is a social construct and not a universal. Certain intangible goods are likely to remain scarce by definition or by design; examples include awards generated by honors systems, fame, and membership of elites. These things are said to have scarcity value; that is to say, all or most of their value is derived from their scarcity. Define the concepts of marginal benefit / marginal cost. What is the relationship between marginal benefit / cost and scarcity? Marginal benefit is the benefit a...
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What is monetary policy? Essay on Monetary Policy Monetary policy is one of the tools that a national Government uses to influence its economy. Using its monetary authority to control the supply and availability of money, a government attempts to influence the overall level of economic activity in line with its political objectives. Usually this goal is "macroeconomic stability" - low unemployment, low inflation, economic growth, and a balance of external payments. Monetary policy is usually administered by a Government appointed "Central Bank", the Bank of Canada and the Federal Reserve Bank in the United States. According to the Encarta the definition of monetary policy is the following economic principles and programs adopted by a government that manage the growth of its money supply, the availability of credit, and interest rates. In the United States, the Federal Reserve Board determines monetary policy. The U.S. monetary policy affects many financial decisions for people and, since it is the biggest economy in the world, it also impacts other economies in other countries. The object of the system is to influence factors like inflation, economic output, and employment by affecting demand (the public's willingness to spend on goods and services). The system is conducted by the Federal Reserve System and it influences demand mainly by raising and lowering short-term interest rates. How is the Federal Reserve Structured? The Federal Reserve (the nation's central bank), called the fed for short, was established by congress in 1913 and consists of the Board of Governors in Washington, D.C., and twelve Federal Reserve District Banks. Although the fed is accountable to congress and structured by law, it is totally separate from the departments that manage the country's spending decisions. The governors are appointed by the president for terms of 14 years. The appointments are staggered so no one single...
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Macroeconomics deals with a number of large totals or aggregates which are used to conceptualise and measure key components of the economy. The most fundamental of these is the total output of goods and services, conventionally referred to as the national income. Domestic income" is that produced within a country by all producers operating there, whether foreign or not.".National income" is that produced only by "nationals" of that country, whether they are producing it there or elsewhere.) It is generally used as an indicator of the economy's performa. Because a larger output or income is equated with a rise in the economic well-being of a country's population, a higher output or income is considered desirable and a lower one undesirable.The economy's overall performance is tracked by the changing value of the total output or income statistic. Comparisons of relative well-being among different countries are based on these statistics and a host of political and social as well as economic implications flow from their behaviour over time. #Measuring Total Output by the Expenditure Approach Measuring total output by the expenditure method involves breaking down total spending on all goods and services produced into four categories: spending done by consumers on goods and services (abbreviated simply to the letter C); spending done by businesses on capital goods (total investment spending, I); spending by governments on goods and services, G); and net exports (the total value of exports minus the total value of imports, X-M). Because all spending done in the country falls into one or other of these four categories, we can say that total expenditure is the sum of C+I+G+(X-M). We now examine each of these four main components of total spending. Consumption spending is the total of all outlays made by households on final goods and services.C also excludes purchases of second-hand goods that were produced...
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Navigation Acts The Navigation Acts, or the Acts of Trade, were a set of rules or laws drafted by the British which, in effect, protected British commerce and economy. Among other things, the acts stated that the only ships which would be allowed to import European goods were ships that were owned by Englishmen, contained goods that were to be shipped to people of the origin country, or whose first shipment was to England. Holland, who was England's main competitor at the time, was completely decimated by this blow. The Navigations act caused Holland's trade to drop off very sharply, promptly eliminating any competition from the international seas. The Navigation Acts also imposed several other seemingly harsh rules of trade, forcing all foreign commodities to be shipped through English ports before reaching their final destination of America. The British Empire also ensured that the American colonies could only export their staple goods (sugar, cotton, tobacco) to them, guaranteeing that England would be the only nation to prosper from the newly founded colonies. This, along with other contributing issues, spawned increasingly negative sentiment between the colonists and British, especially over the issue of sugar. Due to hiked taxes on French Indian sugar, the colonists were forced to buy considerably more expensive British Indian sugar. This lead to more colonial hatred towards the Crown, leading to smuggling, which of course led to the Crown further disliking the colonies. Triangle Trade Routes The international traders found a rather ingenious way of legally bypassing England's Navigation Acts by means of what were known was the "triangle trade routes." Trade ships would begin in the colonies, where they would fill their ships with furs, grains, and other materials not immediately available in Europe, and then sail to Europe, selling and unloading all of their wares. The ship would then...
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My report was done on the country of Paraguay. This is a very interesting yet different country then ours. It has many of the same features as the United States. One of them being its form of Government, it is listed as a "Republic" on paper but has all the same principals of a "Democracy". Also there are many differences about this country as well. The first being their literacy rate, it is currently at 81% the lowest of the surrounding countries. The life expectancy for males is 65 and for females 69. Their population under 15 years old is a large 425 highest of surrounding countries. However, the population has been growing since 1990 at a rate of almost 3.5 %. In Comparison this country is about the size of California yet has about half of its population. The main spoken language is Quariani but Spanish is a close second, however this is not the Spanish we speak it is more of a dialect of the Spanish language we are studying. Also many Indian languages such as Lenqua, Nivacte, and Ache exists but these are only spoken is the forest regions of the country where very few people speak them. Paraguay is not very "high tech" at all. In fact it has a high unemployment rate of about 8%. There are many markets for shopping but very few stores, as we know them throughout the country. The electricity is hydrogenated and also in very limited supply. Six million kilowatts on average is what is generated. Therefore only a limited amount of buildings have power. All governmental buildings as well as 50 others. Most of Paraguay's money is generated from a few agricultural products. Such as cotton, sugarcane, soybeans, corn, heat, tobacco, cassava (tapioca), fruits, vegetables; beef, pork, eggs, and milk. Paraguay is made up...
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For most Americans the term welfare is associated with any number of negative images: laziness, illegitimacy, family breakup, irresponsibility, and wasted tax dollars. We hear "welfare" and our minds conjure up a young unwed mother of two or three infants, huddled in front of a TV set in a public housing tenement and living at taxpayer expense on monthly Aid to Families with Dependent Children (AFDC) checks and food stamps. We react negatively because too often these checks subsidize bad behavior and encourage dependency rather than self-responsibility. The American Heritage dictionary defines welfare as "receiving regular assistance from the government or a private agency because of need." What is surprising about our modern-day welfare state is just who it is that Congress really believes to be "in need." Some of the most subsidized recipients of public assistance are not welfare queens housed in public tenement apartments. They are not even poor or ailing at all. Far from it. America's most costly welfare recipients today are Fortune 500 companies. In 1997 the Fortune 500 corporations recorded best-ever earnings of $325 billion, yet incredibly Uncle Sam doled out nearly $100 billion in taxpayer subsidies.1 These welfare payments come in every conceivable shape and size: government grants, sweetheart business deals arranged by the Commerce Department, cut-rate insurance, low-interest loans, a protective wall against foreign competition, exclusive government contracts, and a mind-boggling maze of special interest loopholes in the tax code. Table 1 lists the 1997 appropriations for fifty-five of the most unjustified federal business subsidy spending programs as compiled by the Cato Institute. Their combined price tag came to $38 billion in 1997. All but a small handful of America's wealthiest corporations have participated in the hunt for federal or state government subsidies. Most of these companies are double-, triple-, and quadruple-dipping. In 1996 General Electric won...
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Explain the role in the global economy of International organisations Globalisation is the actual movement or potential to move across borders of nations in areas of trade, investment, technology, finance and labour. It has resulted in increasing financial flows and trade between countries, as each country tries to establish itself into the gobal economy, and gaining the benefits associated with gobalisation. This has resulted in the formation of numerous International organisations that aim at promoting policy coordination amongst countries and attempt to provide rules and investment transactions and a forum for discussion of trade related issues. Such international organisations are, the World Trade Organisation (WTO), International Monetary Fund (IMF), The World Bank, Organisation for economic cooperation and development (OECD), Organisation of Petroleum Exporting Countries (OPEC), and the Group Seven (G7). The WTO is the main multilateral trading agreement which provides a forum for countries to promote free trade and resolve trade disputes. Its various roles include enforcing the existing WTO agreement, resolving disputes, and liberalising world trade by implementing global trade agreements. These agreements lay ground rules, that promote cooperation between countries. The WTO also exists in order to provide non-discrimination between member countries, liberalisation of trade which involves the removal of all tariff and non-tariff barriers, stability of trading relations where WTO mechanisms are set up to discuss and solve trade disputes between countries, and Transparancy of trade agreements, where trade preferences between countries are scrutinised and discussed in the WTO forum thereby reducing corruption. Without the WTO, globalisation would be a struggling process as countries would have difficulty organising trade policies, often resulting in many countries at a disadvantage. In essence the WTO serves as a forum to ensure that all its member countries benefit from globalisation. The IMF is an international organisation established to promote international monetary cooperation, exchange stability,...
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Wages in the work place are equal, right? This is the year 2002. We've come a long way past the negative stereotypes of June Clever. Women are just as proficient as men. Several pieces of legislation have been enacted in an attempt to solve the problem of gender-based wage inequality. Then why do we still have the difference in wages? The answer is clear. Gender-based inequality still exists in the American work place. The glass ceiling is an expression used to clarify the "invisible barrier" that limits advancement in the course of a number of women's careers. There is documentation which states that women deal with challenges in their career that men will never face. Some of these challenges that women deal with are negative female stereotypes, increased visibility due to being a minority, exclusion from formal mentoring structures and negative valuation in management/leadership roles (Monks and Barker). The glass ceiling phenomenon lists three models: the human capital model, the ruling elite model, and the developmental model (Daley). The human capital model describes results in relation to individual distinctiveness. When the ratio of women to men in the labor force is observed, the actual number of women in executive titles is lacking due to the lack of expertise, experience, skill and the decisions they have chosen. The ruling elite model suggests that women are not as successful in their careers due to the views of society. Female characteristics and negative stereotypes have hindered women and forced them to choose traditional careers or not allow them to hold supervisory titles. The developmental model views the glass ceiling as a short-term hindrance that training and development will solve. This model fails to acknowledge contributing factors of discrimination and the negative view of society (Daley). President Kennedy passed the Equal Pay Act into a law in...
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Lifetime employment in Japan has long been regarded as one of the stereotypical features in the Japanese workplace. Our readings have shown us varying degrees of lifetime employment's viability as an institution in different work environments and social classes. Exemplified through ethnographies about line workers at Yusumi Motors and the Azumi lingerie factory, the office ladies and salaried men in a Japanese bank, and the social elite of Japan's doozoku geisha, it can be seen that there are elements of lifetime employment in each example as well as some important biases and inconsistencies in each. At Yusumi Motors, Joshua Roth's study was to examine how the factory ran and what it was like to be a foreign working alongside the Japanese. Studying the relationship between foreign and domestic workers on the line at Yusumi gives us some insight into the validity of a lifetime employment system in Japan. It is important to mention here that this study contains some biases as it is a narrow view of only one company and hence may not be reflective of all Japanese workplaces. It is also important to note again that Roth's study is on the work and workers of the factory and not lifetime employment. Speculation on lifetime employment at Yusumi may not be completely representative of the system. Another bias of importance is that Roth came to Yusumi as an outsider, where there are a lot of foreign workers whom are not typically brought on to stay till retirement. This could affect Roth's views on Yusumi as a lifetime employer. As Roth explains in his piece, lifetime employment systems in Japan have been waning as a result of the Japanese financial crisis. Companies seek to hire cheaper labor often found by bringing in foreign workers and day-laborers, which reflects a shift in the...
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We all have times of financial crisis, and in those times we find ourselves trying to spend the least amount of money we can on necessary items without sacrificing quality. Goodwill Industries, a company with over 1,700 stores throughout the country can do just this; save you money on necessities without losing quality. However, there are numerous reasons to shop at your local Goodwill store, and while this appears to be the most common one, it is only one of many. The Goodwill Store carries used items that people have donated to the company, some of which have been refurbished, and has a broad selection of goods that meet the needs of even the most fickle person. Not only gender and type organize clothing, but color. This feature is nice when shopping for a garment that matches another piece of clothing you own, because it allows you to view the whole spectrum of pink, blues, oranges, etc. that are available to buy instead of having to root through different colored garments in search of one that matches. In addition to clothing, the Goodwill Store carries furniture ranging from end tables to sectional sofas. Prices on clothing and furniture are very reasonable, shirts going for roughly two dollars and thirty five cents, most pants not over eight to ten dollars, and furniture, depending on quality, can range anywhere from a mere four dollars to anywhere upwards of a hundred. One of the best features of the Goodwill Store is their selection of clothing. The clothing in the store, being donated, is basically one of a kind as opposed to the store having twenty to thirty of the same items stocked on the shelf. This gives the Goodwill Store shopping experience a little excitement because you never know what you will find. Likewise, you...
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Understanding the dynamics of the international business environment is a complex process because there are so many factors that can impinge the success or otherwise of an international business. The business environment is changing and its volatility is increased by the threat of competition and changing business culture. Most importantly, as MNCs venture into new and unknown grounds, they have to carefully consider respective countries' risks that they are dealing with. Political Ideologies and Economics An ideology is a set of integrated beliefs, theories and doctrines that helps to direct actions of a society. Political ideology is almost intertwined with economic philosophy. For example, the political ideology in USA is grounded in the Constitution, which guarantees the rights of private property and the freedom of choice. This has helped to lay the foundation for US capitalism. A change in this fundamental ideology would alter the economic environment of the USA. The political and economic ideologies of nations are important factors in managing country risks. Political systems. In the extreme, there are two types of political systems: democracy and totalitarianism. Democracy is a system of government in which the people, either directly or through their elected officials, decide what is to be done. Good example include the USA, Canada, England and Australia. Common features of this system include (1) the right to express opinions freely (2) election of representatives for limited terms of office (3) an independent court system that protects individual property and rights and (4) a relatively nonpolitical bureaucracy and defense infrastructure that ensure the continued operation of the system. On the other hand, totalitarianism is a system of government in which one individual or political party maintains complete control and either refuses to recognise other parties or suppresses them. There are a number of types of totalitarianism that currently exist. The...
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