Rent Control - New York

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What is rent control

It is a system in which the government has developed policies to restrict the landlords of the amount they can charge their clients to pay for accommodation. This system was developed to offer affordable housing to the citizens (Richard Arnott 15).

What are the objectives of rent control

The act was made to benefit the tenants majorly is populated cities. That is by providing affordable housing in populated areas. Initially, apartment owners would charge exaggerated amounts without maintaining their buildings to the required standards. In the New York the rent control act was designed to stop rent hikes in apartments with six or more floors.

Who benefits from rent control

Rent control act mainly benefits the tenants of the apartments. This is because it grants security over their stay in a specific apartment and also controls the rents that they are charged. The act offers security to the tenant to prevent the landlord from chasing the tenant anytime from the apartment or increasing the rent extremely. Though the rent control act favors the existing tenants in an apartment and not the new ones (Lance et al 34). A good example is in San Francisco where rent amounts are unregulated for new tenants through the existing tenants have the right to renew their rent control at a regulated rent increase.

How does rent control negatively affect the market for housing in New York Provide three arguments that represent the negative impact of rent control on the housing market

Research has shown that landlords who have owned apartments between 10 and 20 years can no longer make a good income from their rent-controlled apartments. Therefore the rent they collect cannot cover for the cost of activities such as maintenance and repair. They, therefore, tend to leave several units vacant than operating with tents who are protected under the rent control act (Lance et al 45).

It is estimated that more than 10 units remain vacant quarterly in New York and the vacancy rates keep on increasing yearly, which is according to the New York Times. This is because of the rent control act laws that mainly protect the tenants making it difficult for the landlords to survive (Joseph et al 58). Though with the number of available apartments reducing and becoming difficult for the tenants to find apartments. The prices of market rentals are forced to increase because of the increasing demand for the scarce commodity.

With this act in place, landlords cannot afford the cost of maintenance of their property. Therefore making the apartment to become degraded due to lack of maintenance and therefore with this the value of the nearby apartments tends to suffer too (Richard Arnott 23).

How do the rent-controlled apartments affect the pricing of apartments that are not rent-controlled

Most investors tend to be opportunistic in circumstances such as this. This is because when one realizes that his old apartment is rent-controlled he/she would tend to build a new one that is not rent-controlled (Lance et al 78). Which will charge high rents. Similarly since most old apartments that are rent-controlled may be vacant therefore increasing the demand of houses by the tenant who may have no option than to move to apartments that are no rent-controlled, where the rent level ted to be very high due to the increased demand(Joseph et al 102).

Work cited

Gyourko, Joseph, and Peter Linneman. Equity and efficiency aspects of rent control An empirical study of New York City.Journal of urban Economics26.1 (1989) 54-74.

Freeman, Lance, and Frank Braconi. Gentrification and displacement New York City in the 1990s.Journal of the American Planning Association70.1 (2004) 39-52.

Arnott, Richard. Time for revisionism on rent control.Journal of Economic Perspectives9.1 (1995) 99-120.

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Report

Student’s Name

Professor’s name

Course Code

Date

MyRA

Explain the difference between how these terms are used in the article vs. in the system of national accounts

In the article, the myRA is described as a long term national saving started by the government to help people save money. However, in the national accounts, it is described as the retirement saving accounts, which was created by the department of Treasury for Americans who do not have access to the retirement saving plan. It was established during the tenure of President Obama but got terminated during President Trump. The myRA was therefore, started with a good intention to help in growing the economic base of majority of Americans.

Loanable Curve After the introduction of MyRA

Diagram 1: Loanable Curve

The loanable funds indicate the interaction between the borrowers and the saver. It is described what is being sold and bought from the market by the money. In most cases, the borrowers demand to have loanable money and the savers get to supply the money. However, the introduction of MyRA increased the demand of loanable fund. According to Roell (15), Myra helped individuals to build assets base and therefore, many people become credit worthy. The access to loanable funds is based on saving and therefore, with many people with MyRA the demand for loanable become high hence the supply reduces and the interest rate is likely to increase CITATION Roe18 \p 21 \l 1033 (Roell 21). The slope indicates the change in demand and supply, and the introduction of MyRA increased the demand of loanable. The slopes exist because of the change of demand in the market. It is noted that when the myRA was introduced in the market, there was shift in demand by people. This was a result of high number of potential customers. Therefore, upward slopes shows that many people started to demand loans from the borrowers.

The old equilibrium is the equilibrium which existed before the change was introduced in the market and the new equilibrium is introduced by the market changes. The change in equilibrium is affected by supply and demand, when the products are over supplied the prices will be reduced and this affect the equilibrium CITATION Roe18 \p 14 \l 1033 (Roell 14). In both cases, the equilibrium depends on the how the product is being supplied in the market and the demand in the market.

The introduction MyRA was meant to give Americans the financial security to ensure that the people can be able to access credits. The myRA was introduced by the government to create a pool of resources through saving for those who do not have retirement benefit scheme. First, it looks into the interest of the future by ensuring that people have enough security which can be used to secure funds. With myRA majority of Americans under the program can secure credit facility without difficulty. This is good for the economy because it increase the flow of money and business activities. It can also help in regulating the inflation rate because of the increase of the cash circulation through the program. It helps people to plan for their future, which is a good thing for the economy. By planning for the future, people would not burden the government after retirement. It would be able to give people who have been into the program, a decent housing, and living standard, which is a good thing for developed economy like the United States.

Works Cited

BIBLIOGRAPHY Roell, Sophie. "The Best Introductions to Economics." Economic Analysis (2018): 2-15.

Report

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[Subject]

[Date]

Tokyo Tax Hike

a) The policy that is being talked about here is that fiscal policy. The idea is to make sure that how the taxation structure can be changed to make sure that the fiscal burden that has been faced by the economy can be taken care off in an appropriate manner. Furthermore, it is going to allow them to ensure that they take advantage of the better taxation reforms at the particular point of time.

b)One of the major issues with the policies is that the Japanese economy at the moment is facing considerable changes, and due to that, it is imperative that they take short term steps to ensure that the necessary degree of control can be brought into the economy.

c)As discussed, Japan has to make sure that they take the right sort of trade off when it comes to making sure that the right tradeoff is determined in terms of how the economy is supposed to be run. The change in the monetary policy would follow with great degree of inflation which is a big issue for economy.

d) As there is going to be major change in terms of the change in the taxation structure, what is going to happen is that the AD curve might started to shift towards right thus bringing about an increase in the real GDP and would bring about a decline in unemployment rate at the given point of time.

e)The likely effect of the spending towards change in the spending pattern as well as making sure that the quality of labor is going to be increasing at the particular point of time. At the same time, social spending would also mean that there is going to be improvement in terms of how the social spending is going to be carried out.

Work Cited

https://www.bloomberg.com/news/articles/2019-05-15/japan-s-abe-aims-to-prop-up-domestic-demand-as-tax-hike-looms

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MyRA

Q1: The myRA is defined in the article as a long term national saving for starter, which are used to cover many areas. The national account is described as the retirement saving accounts created by the department of Treasury for people without retirement accounts. Investment is regarded as putting a specific amount in terms of shares or bond for purpose of earning gains.

Q2: Loanable Curve after the introduction of MyRA

Diagram 1: Loanable Curve

The inelastic supply has a huge positive slope and an elastic supply has a small slope. When the supply is inelastic, it means that the investment and saving declined and therefore, interest increases. If the supply is perfectly inelastic then there would be response by private savers. If the saving and investment is lower, then the interest rate would smaller as well.

Q3. The old equilibrium is the equilibrium which existed before the change was introduced in the market and the new equilibrium is introduced by the market changes. The change in equilibrium is affected by supply and demand, when the products are over supplied the prices will be reduced and this affect the equilibrium CITATION Roe18 \p 14 \l 1033 (Sullivan, 2019, p. 14). In both cases, the equilibrium depends on the how the product is being supplied in the market and the demand in the market.

Q4.

Graph 2: Loanable curve -Supply elastic

The slope curve means that the supply decreases when myRA is introduced by the government. It can be translated that when the myRA was introduced the demand become high and therefore, the supply reduced since organization could not provide loan top everyone.

The equilibrium point indicates the point where the demand and supply are equal. And in graph 2, which is the second graph, the equilibrium is the point where the loanable could be enough for everyone wanted credit facilities. However, in graph 1, the equilibrium is the point where the demand and the supply are equal. At this point the credit facilities available can supply all clients, which are in need of the loans.

The curves for part 1 and 2 are different because of the increase demand due to increase of income from the public. In part one the loanable is inelastic and therefore, the high demand does not affect it, in part 2, the loanable is elastic. It means that in part two, the position of the curve changes based on the increase or decrease of thee demand and rate of market supply as well.

The introduction MyRA was meant to give Americans the financial security to ensure that the people can be able to access credits. The myRA was introduced by the government to create a pool of resources through saving for those who do not have retirement benefit scheme. First, it looks into the interest of the future by ensuring that people have enough security which can be used to secure funds. With myRA majority of Americans under the program can secure credit facility without difficulty. This is good for the economy because it increases the flow of money and business activities. It can also help in regulating the inflation rate because of the increase of the cash circulation through the program. It helps people to plan for their future, which is a good thing for the economy. By planning for the future, people would not burden the government after retirement. It would be able to give people who have been into the program, a decent housing, and living standard, which is a good thing for developed economy like the United States.

Works Cited

BIBLIOGRAPHY Roell, Sophie. "The Best Introductions to Economics." Economic Analysis (2018): 2-15.

An inelastic demand has a larger (negative) slope. For an inelastic demand, theincrease in the interest rate is larger but the fall in savings and investment issmaller. On the other hand, if the demand is elastic (small negative slope) thenthe change in interest rates is smaller but savings and investment see a largerdecline.

Research Essay

The Solow Growth Model

[Author Name(s), First M. Last, Omit Titles and Degrees]

[Institutional Affiliation(s)]

Author Note

The Solow Growth Model

The extrinsic model of economic growth that measures and analyzes the significant changes in the economic levels over time due to the variations in the savings rate, population growth rate, and the technological progress rate of a country, is known as Solow Growth Model. The modern theory related to economic growth is based on this model. This model is based on the following assumptions CITATION Cor \l 2057 (CorporateFinanceInstitute):

If the current population of a country is represented by N, and the future population by N’, then assuming that the constant growth rate (represented by g), it is stated that N’ = N (1+g).

Every consumer in the economy consumes some part of his income (represented by C) and saves the remaining part (represented by s). Thus, the output which is represented by Y is linked with the consumption through the equation, C= (1+s) Y.

Every firm in the economy takes labor and capital as inputs to produce respective outputs. Thus, the output level (Y), the capital level (K), and the labor level (L) are all connected through the equation, Y = a*F* (K, L).

K, K’, d and I represent the current capital stock, the future capital stock, the capital depreciation rate, and the capital investment rate respectively. These all are connected through the equation K’= K (1-d) + I.

It is one of the assumptions of the Solow Growth Model that the function of production follows constant returns to scale (CRS). So, following this assumption, if the levels of capital stock and the labor are doubled, then the output level is also doubled. Therefore, a major portion of the mathematical analysis of this model is focused on the output and capital per employee/worker instead of collective capital stock and collective output.

The Relevance of Innovation and Technology in the Economic Growth of Australia Based on the Solow Growth Model

It is often observed that most of the long term models related to economics have a slow growth rate. The Solow growth model is actually based on the model presented by Harrod Domer. The model is designed in a way that its development depends on the magnitude of production by a country. One of the important factors of the model, experienced by Australia, is the savings rate. The general growth of a country highly depends on its technological progress. Greater the technological progress of a state, greater will be its growth. Another necessary factor responsible for growth is innovation. Explanation of the economic conditions of a company is also important while discussing and applying the Solow growth model on it. In the year 2017, the Gross Domestic Product (GDP) of Australia was approximately $1.3 trillion. And it has been continuously increasing for the last three years. However, this increase is consistent but not too much CITATION The18 \l 2057 (TheWorldFactbookAgency—CentralIntelligence, 2018). This is one of the common characteristics of developed countries throughout the world. The same increasing trends are found in the economies of other developed countries like the United Kingdom or Japan. The possible reason for the steady growth in Gross Domestic Product for the countries is the growth right from the initial level.

In the year 2017, the Gross Domestic Product growth rate for Australia was 2.1 percent. A significant increase in the per capita income of Australia is recorded in the past years and its growth rate can be stated as modest. Australia’s per capita income is around $50,000 which is the same as that of Japan but the increase recorded in the case of Australia is around $1500 CITATION The18 \l 2057 (TheWorldFactbookAgency—CentralIntelligence, 2018). In the year 2017, the gross savings rate of Australia was 22% of its total Gross Domestic Product CITATION The18 \l 2057 (TheWorldFactbookAgency—CentralIntelligence, 2018). Thus, it can be stated that the most prominent part of the economic culture of Australia is its savings culture, which needs to be discussed throughout this paper. The increased gross savings rate of Australia has helped the country in the funding of its investments. However, other countries have a higher savings rate as compared to Australia.

By comparing the economic progress of Australia on the Solow growth model, the growth of the country is found to be nearly declining. In order to make it purely steady, Australia needs to balance its depreciation level. The concerned parties should understand that a single investment cannot improve the rate to the same value as it was before. Capital depreciation can occur on additional investments. The importance of the golden rule cannot be denied while discussing the Solow Growth Model as, on the golden rule level, the capital accumulation is maximum. Graphically, at this point, the slope of the total productivity curve is equal to that of the depreciation curve. The graph attached below explains the phenomenon properly (Dalgaard & Strulik, 2013). 

Figure1: The Solow Growth Model

The description of this graph is necessary. The production function of the country is represented by the line which is labeled Y= f (k). The investment done in the country is represented by the line s* f (k). Also, it has to be stated here that the capital generated per worker is represented by the horizontal axis on the graph. And the output generated per person or per person income is represented by the vertical axis. Maximum capital accumulation is represented by point K**. At this point, the slope of the product is maximum. The steady-state, however, is represented by the point K* at which the investment equals depreciation. It can be observed from the graph that the productivity is at its maximum value. Another important conclusion drawn from the above-mentioned graph is that capital dissipation will occur if the country invests beyond this point. Also, it is evident from the graph that the productivity will decrease beyond this point (Solow, 1956). This is due to the diminishing returns of many factors. Many investigations have shown that Australia is one of the developed nations of the world. The important economic figures like the gross domestic product and the per capita income of Australia verifies its stability. The country has been in the steady-state multiple times. In this context, it can also be stated that the population growth and the technological progress in the country have displaced the level of the golden rule and the steady-state of the country. This has been done by changing the slopes of the production function, investment line, and the depreciation line. The demographic results of the country show that currently, it has been represented by a low death and birth rate, and is included in the third level of demographic transition. Therefore, it will not be wrong to say that in the near future, the country will face minimal population growth. (Jones, 1995)

Figure2: The growth process for the developing country

The effects of population growth on the economy of the country are represented by the above-drawn graph. It has been observed that the depreciation line is shifted in an upward direction with the increase in the population of the country. Steady-state of the country also depends on these factors and will surely change. This shift in the graph is from point K* to K*’. Along with the variation in the steady-state level, the golden rule level of the country will also change.  In the above diagram, the point at which the productivity function and blue dotted line become tangent is the modified state of the golden rule. Also, the value of capital accumulation is maximum at this point. In this context, according to the golden rule, there is no sign of appearance of any diminishing factors. Thus, Australia is included in the category of either developing or underdeveloped countries.

The possible reason for this downfall is the higher rate of population increase as compared to the country's technological progress. By the results of this analysis, it can be stated that the increase in population growth would beat the overall innovation and technological progress of the country. For such states, the increase in population is massive and on the contrary, their technological progress is minimal.  The reason, in this case, can be the decreased investment and saving rates. Higher saving rates of a country encourage its technological progress and innovation. It can be stated that the shift of steady-state to the state of lower equilibrium would decrease the overall productivity and the per capita capital in the country. The inward shift in the production curve explains this phenomenon. As stated above, the population growth of Australia is minimal. But on the other hand, the technological progress of the country is huge in the middle part. Innovation demands a healthy atmosphere and environment for research and development. Thus, it can be concluded that the overall innovation and progress in technology in Australia has beaten its decreased population growth. (Jones, 1995). 

Figure 3: Australia and The Solow Growth Model 

The above graph explains the trends in the economic growth of Australia.  The steady-state achieved by the country in its initial levels are represented by the black line in the graph. The vertical axis represents the per capita income and K* represents the initial steady-state level of the country. Better saving rates of the country have assisted it in its investments, which have resulted in better productivity. The overall dissipation in the capital is decreased in the country due to its advancements in technology. This has increased the per capita income as well as the general income of the people of Australia. In the graph, the income level for the country is represented by the point of intersection of the black investment line and the blue depreciation line. The increased income levels would automatically encourage the increase in saving rates of the country. Ultimately, the change in saving rates will produce some changes in the slope of the line represented by s*f(k). (Blue investment line). It would result in achieving a higher steady-state which is represented by the depreciation line in blue and the investment line represented by K*. The golden rule will also change due to the shift in the depreciation line resulting in the maximum value of capital accumulation. This would further increase the income levels of the people of Australia. This increase can be observed on the graph by the income levels and the point K**.  It can be stated here that the levels of income per capita and capital per capita would increase as the country reaches the new steady state.

If Australia continues to progress in the same way and if its economy is not disturbed by any external factors, then it would move on to even higher and better equilibrium level. This would automatically increase the productivity function of the country.  However, the consumption level of the country will also increase. Many investigations and research has shown that the consumption level of a country affects its investment rates directly. In this case, the increased consumption level will increase the investment rates of Australia as well. If the savings rate remains the same, then the overall savings will increase. (Blanchard, 2011).

Also, if Australia reaches the steady-state successfully, then it can change its saving rates as well, which will help it achieve an even higher equilibrium state. (Mankiw, 2014).  The analysis of this phenomenon will become easier if the reiteration of the savings-investment is also considered. Investments of a country directly depend on its savings. Higher the savings, the higher will be the investment. Thus, in order to promote their economies, developed countries like Australia have to reduce their savings rates. (Blanchard, 2011).  Conclusion

Observing the recent trends of economic conditions of Australia, it is concluded that the increased level of innovation and progress in technology has helped Australia to reach a level of the golden rule of capital and a higher and better steady-state. This would have many positive effects on the overall growth of the country. An important thing to note here is that it is a rare case for any developed nation which has achieved a growth in its Gross Domestic Product of more than 2 percent a year. In comparison with Japan, the economic growth rates in Australia are almost double. However, other economic parameters like the gross domestic product per capita and the savings rate for both the countries have been approximately similar.

References

BIBLIOGRAPHY CorporateFinanceInstitute. (n.d.). Solow Growth Model. Retrieved from corporate financeinstitute:https://corporatefinanceinstitute.com/resources/knowledge/economics/solow-growth-model/

TheWorldFactbookAgency—CentralIntelligence. (2018). The World Factbook. Retrieved from Central Intelligence Agency.

Dalgaard, C. J., & Strulik, H. (2013). The history augmented Solow model. European Economic Review, 63, 134-149.

Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), 65-94.

Jones, C. I. (1995). Time series tests of endogenous growth models. The Quarterly Journal of Economics, 110(2), 495-525.

Blanchard, O. (2004). The economic future of Europe. Journal of Economic Perspectives, 18(4), 3-26.

Durlauf, S. N., Kourtellos, A., & Minkin, A. (2001). The local Solow growth model. European Economic Review, 45(4-6), 928-940.

Heshmati, A. (2001). On the causality between GDP and health care Eexpenditure in augmented Solow growth model (No. 423). SSE/EFI Working Paper Series in Economics and Finance.

Research Paper: The Evolution Of Behavioral Economics

Research Paper: The Evolution of Behavioral Economics

[Name of the Writer]

[Name of the Institution]

Research Paper: The Evolution of Behavioral Economics

Introduction

There are different schools of thoughts in economics. These schools of thoughts present different ideas and predictions to run economy including Keynesian, classical, neo-classical, and behavioral school of thoughts. Neo classical theory is the prolonged version of classical theory. On the other hand, behavioral economics is the study of the psychological factors that influence the economic decision making of the people. The main purpose of the study is to analyze the difference between neo-classical and behavioral theory along with the leading figures of economics and current state of behavioral economics.

Discussion

There are major differences between neo-classical and behavioral economics. The first and most crucial difference is the unrealistic assumptions. Neo-classical theory is based on various unrealistic assumptions like individuals are selfish, eager, self-interested, good planner and are accurate calculating machine which cannot be seen in real world. Whereas, behavioral theory presents more realistic view by focusing the psychology of the people during economic decision making ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"eOKYzqrx","properties":{"formattedCitation":"(Camerer & Loewenstein, 2003)","plainCitation":"(Camerer & Loewenstein, 2003)","noteIndex":0},"citationItems":[{"id":754,"uris":["http://zotero.org/users/local/rVaVAHaF/items/4NRAZCGT"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/4NRAZCGT"],"itemData":{"id":754,"type":"chapter","title":"Behavioral Economics: Past, Present, Future","container-title":"Advances in behavioral economics","publisher":"Princeton University Press","publisher-place":"Princeton, N.J.","page":"1-61","source":"authors.library.caltech.edu","event-place":"Princeton, N.J.","abstract":"Behavioral economics increases the explanatory power of economics by providing it with\nmore realistic psychological foundations. This book consists of representative recent articles in\nbehavioral economics. This chapter is intended to provide an introduction to the approach and\nmethods of behavioral economics, and to some of its major findings, applications, and promising\nnew directions. It also seeks to fill some unavoidable gaps in the chapters’ coverage of topics.","URL":"http://resolver.caltech.edu/CaltechAUTHORS:20110204-152338626","ISBN":"978-0-691-11681-5","shortTitle":"Behavioral Economics","author":[{"family":"Camerer","given":"Colin F."},{"family":"Loewenstein","given":"George"}],"issued":{"date-parts":[["2003"]]},"accessed":{"date-parts":[["2019",9,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Camerer & Loewenstein, 2003). In other words, neoclassical assumes that individuals are rational while behavioral consider individuals as irrational. Neoclassical assumes that individuals’ preferences do not change for any reason while behavioral economics believes on unstable preference by individuals. In addition, neoclassical states that there is no issue resisting temptation while behavioral economics study psychology of individuals and consider this issues ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"mEDXtPoS","properties":{"formattedCitation":"(Mullainathan & Thaler, 2000)","plainCitation":"(Mullainathan & Thaler, 2000)","noteIndex":0},"citationItems":[{"id":752,"uris":["http://zotero.org/users/local/rVaVAHaF/items/EXSNEJ9J"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/EXSNEJ9J"],"itemData":{"id":752,"type":"report","title":"Behavioral Economics","publisher":"National Bureau of Economic Research","genre":"Working Paper","source":"National Bureau of Economic Research","abstract":"Behavioral Economics is the combination of psychology and economics that investigates what happens in markets in which some of the agents display human limitations and complications. We begin with a preliminary question about relevance. Does some combination of market forces, learning and evolution render these human qualities irrelevant? No. Because of limits of arbitrage less than perfect agents survive and influence market outcomes. We then discuss three important ways in which humans deviate from the standard economic model. Bounded rationality reflects the limited cognitive abilities that constrain human problem solving. Bounded willpower captures the fact that people sometimes make choices that are not in their long-run interest. Bounded self-interest incorporates the comforting fact that humans are often willing to sacrifice their own interests to help others. We then illustrate how these concepts can be applied in two settings: finance and savings. Financial markets have greater arbitrage opportunities than other markets, so behavioral factors might be thought to be less important here, but we show that even here the limits of arbitrage create anomalies that the psychology of decision making helps explain. Since saving for retirement requires both complex calculations and willpower, behavioral factors are essential elements of any complete descriptive theory.","URL":"http://www.nber.org/papers/w7948","note":"DOI: 10.3386/w7948","number":"7948","author":[{"family":"Mullainathan","given":"Sendhil"},{"family":"Thaler","given":"Richard H"}],"issued":{"date-parts":[["2000",10]]},"accessed":{"date-parts":[["2019",9,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Mullainathan & Thaler, 2000).

Various economists contributed their time and effort to present the best prediction to make individuals and economies stable and prosper. Alfred Marshall is the prominent name whose main focus was microeconomics. He was a British economist. Marshall presented the approach of factors that lead to shift in supply and demand. Other contribution of Marshall included concept of price elasticity of demand, consumer surplus, producer surplus, marginal utility costs of production, and taxation. He wrote the book “principle of economics” and work for economics from 1890 to 1924 (until death). Alfred Marshall is known as founder of neo classical economics. He became the first principal of University of Bristol. In 1899 he became president of cooperative congress. Besides he acquired numbers of achievement in his life due to his contribution in economics. Another famous name in economics is Richard Thaler. He was an American economist known as founder of behavioral economics. He has born in a Jewish family in September 12, 1945. He got Nobel Memorial prize in economic sciences in 2017. His main contribution was the putting the foundation between psychology and economics during the process of economic decision making. The books which he wrote include The Winner’s Curse, Misbehaving: The making of behavioral economics, and Quasi-rational economics in which he presented the theories and information for behavioral economics. Besides, he was a columnist and wrote various columns focusing on US economy.

Behavioral economics presents insight of people through psychological factor while making economic decision. However, it is still not acceptable by most of the economist for teaching. This is because in most of the economic setting behavioral elements show no impact and where they do economist have other explanations to explain the situation. In addition, there are various school of thoughts within behavioral economics which create conflict about which is the main stream. Therefore, behavioral economics does not incorporate into the mainstream of economic teaching even after becoming a field itself ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"fQy9veLx","properties":{"formattedCitation":"(\\uc0\\u8220{}Let\\uc0\\u8217{}s not emphasize behavioral economics,\\uc0\\u8221{} 2018)","plainCitation":"(“Let’s not emphasize behavioral economics,” 2018)","noteIndex":0},"citationItems":[{"id":756,"uris":["http://zotero.org/users/local/rVaVAHaF/items/KIF5PYYR"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/KIF5PYYR"],"itemData":{"id":756,"type":"webpage","title":"Let's not emphasize behavioral economics","container-title":"Econlib","abstract":"The Atlantic has an article decrying the fact that economists are refusing to give behavioral economics a bigger role in introductory economics courses. I’m going to argue that this oversight is actually appropriate, even if behavioral economics provides many true observations about behavior. The core ideas of economics are extremely counterintuitive and are not accepted …","URL":"https://www.econlib.org/lets-not-emphasize-behavioral-economics/","language":"en-US","issued":{"date-parts":[["2018",12,28]]},"accessed":{"date-parts":[["2019",9,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Let’s not emphasize behavioral economics,” 2018).

Conclusion

Behavioral economics is a new idea which shows correlation between psychological factors and economic decision making. Neo classical is the prolonged version of classical school of thought while behavioral economics present more realistic view. Alfred Marshall and Richard Thaler are two famous economists who serve their time and effort in the field of economics. Behavioral economics becomes a field itself but it is unable to incorporate with the mainstream of economics because economists prefer other non-psychological factors to explain different models and economic conditions.

Work Cited

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Camerer, C. F., & Loewenstein, G. (2003). Behavioral Economics: Past, Present, Future. In Advances in behavioral economics (pp. 1–61). Retrieved from http://resolver.caltech.edu/CaltechAUTHORS:20110204-152338626

Let’s not emphasize behavioral economics. (2018, December 28). Retrieved September 16, 2019, from Econlib website: https://www.econlib.org/lets-not-emphasize-behavioral-economics/

Mullainathan, S., & Thaler, R. H. (2000). Behavioral Economics (Working Paper No. 7948). https://doi.org/10.3386/w7948

Research Project

Principles of Microeconomics

Name

[Institutional Affiliation(s)]

Author Note

Major Exports and Imports of the United States

The US is one of the leading trading economies in the world. It is the 3rd largest export economy in 2018 and leads the world in terms of import of goods and services. Computer and electronic products were the biggest import of the US ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"jtiXCPam","properties":{"formattedCitation":"(\\uc0\\u8220{}U.S. imports of trade goods in 2018, by product industry class (NAICS),\\uc0\\u8221{} n.d.)","plainCitation":"(“U.S. imports of trade goods in 2018, by product industry class (NAICS),” n.d.)","noteIndex":0},"citationItems":[{"id":1095,"uris":["http://zotero.org/users/local/s8f0QVnP/items/SBR3IKCL"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/SBR3IKCL"],"itemData":{"id":1095,"type":"webpage","abstract":"This graph shows the volume of U.S.","container-title":"Statista","language":"en","title":"U.S. imports of trade goods in 2018, by product industry class (NAICS)","URL":"https://www.statista.com/statistics/259138/volume-of-us-imports-of-trade-goods-in-by-product-industry-class/","accessed":{"date-parts":[["2019",12,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“U.S. imports of trade goods in 2018, by product industry class (NAICS),” n.d.). Transportation equipment was the major export of the US in 2008, followed by chemicals and machinery ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"S3ech4Eb","properties":{"formattedCitation":"(\\uc0\\u8220{}U.S. exports of trade goods, by product industry class (NAICS) 2018,\\uc0\\u8221{} n.d.)","plainCitation":"(“U.S. exports of trade goods, by product industry class (NAICS) 2018,” n.d.)","noteIndex":0},"citationItems":[{"id":1097,"uris":["http://zotero.org/users/local/s8f0QVnP/items/MNVZ3BSU"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/MNVZ3BSU"],"itemData":{"id":1097,"type":"webpage","abstract":"This graph shows the volume of U.S.","container-title":"Statista","language":"en","title":"U.S. exports of trade goods, by product industry class (NAICS) 2018","URL":"https://www.statista.com/statistics/258736/volume-of-us-exports-of-trade-goods-in-by-product-industry-class/","accessed":{"date-parts":[["2019",12,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“U.S. exports of trade goods, by product industry class (NAICS) 2018,” n.d.).

A country can increase its production and consumption possibilities by increasing its trade. The comparative advantage theory explains that a country can get benefits from international trades and the overall wellbeing of the trading economies will be increased. An economy can import those goods and services from other countries in which it has a comparative disadvantage and export the goods and services in which it has comparative advantage. International trade will not only increase consumer surplus but producers will also gain higher profits.

Determination of Exports

The pattern of trade is determined by the laws of economics. The comparative advantage theory explains and suggests the pattern of trade. Comparative advantage can be explained as a condition in which a country can produce a good or service at lesser opportunity cost as compared to the opportunity cost of this particular good or service in another economy ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"q2LJP2t0","properties":{"formattedCitation":"(McEachern, 2011)","plainCitation":"(McEachern, 2011)","noteIndex":0},"citationItems":[{"id":1100,"uris":["http://zotero.org/users/local/s8f0QVnP/items/A7NH38CQ"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/A7NH38CQ"],"itemData":{"id":1100,"type":"book","edition":"9th","event-place":"Boston","publisher":"Cengage Learning","publisher-place":"Boston","title":"Microeconomics: A contemporary Introduction","author":[{"family":"McEachern","given":"William"}],"issued":{"date-parts":[["2011"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (McEachern, 2011). A country should export the goods and services in which it has a comparative advantage and should import those goods and services from other countries in which it has comparative disadvantage. For example, the US has a comparative advantage in the production of transportation equipment and it is the major export of the US. The US imports electronics from other countries because it has a comparative disadvantage in the production of electronics. The production of electronics domestically will decrease the overall wellbeing of the US as the benefits of decrease in the import of electronics will be less than the benefits of producing and exporting more transportation equipment.

What is WTO?

Soon after World War 2, General Agreement on Trade and Tariffs (GATT) was formed in 1948 to regulate international trade. Industrialization of economies increased the need and importance of international trade. GATT worked with the coordination of all trading economies and tried to minimize the barriers on international trade. In 1995, it was renamed as World Trade Organization. The WTO is an international organization that deals with matters relating to trade between different nations. The promotion of international trade is one of the key objectives of this international organization. The WTO is the destination where all international trade disputes can be discussed and solved with the mutual agreement of trading partners. All major economies of the world are members of this organization and the WTO is also managed by its member countries.

Cheap Imports and Local Firms

Local producers of the US have raised many objections over the goods imported from China as they are relatively very cheap. This argument is entirely against the laws of economics as the theory of comparative advantage explains that all the trading countries can increase their production and consumption possibilities by increasing trade. The rule of thumb here is that American producers should produce and export those things in which they have a comparative advantage. The production of goods in which the American producer have comparative advantage will not only become a source of higher exports but it will also increase the employment levels in the US. Any restriction on trade will harm not only local producers but the local consumers too.

References

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY McEachern, W. (2011). Microeconomics: A Contemporary Introduction (9th ed.). Boston: Cengage Learning.

U.S. exports of trade goods, by product industry class (NAICS) 2018. (n.d.). Retrieved December 12, 2019, from Statista website: https://www.statista.com/statistics/258736/volume-of-us-exports-of-trade-goods-in-by-product-industry-class/

U.S. imports of trade goods in 2018, by product industry class (NAICS). (n.d.). Retrieved December 12, 2019, from Statista website: https://www.statista.com/statistics/259138/volume-of-us-imports-of-trade-goods-in-by-product-industry-class/

Resume

SeongSeok

PERSONAL INFORMATION

Name: Seong Seok

Address:

Mobile no:

E-mail:

AREAS OF EXPERTISE

Restaurant Management

Hoteling Line

Hospitality Industry

Administration

Cost Control

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Strategic Planning

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Conflict Management

Budget Planning

Customer Service

PERSONALITY ASSESMENT

- Extrovert

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- Adequate Computer Knowledge

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capability

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OBJECTIVE:

I am interested to join a reputable organization to use my creative and managerial skills in a positive and progressive way to enrich my knowledge and experience by serving the organization honestly and derive professional satisfaction by helping others in an innovative environment.

PERSONAL SUMMARY

Economics expert with a proven ability to reduce costs and provide strategic leadership. Hands on knowledge and experience of the managerial processes and planning implementation phases required for projects, especially in the field of Hoteling, Hospitality and Restaurant Management. Possessing excellent communication skills and having the ability to communicate professionally with clients, colleagues and senior managers on detailed issues.

Easy going by nature, I am currently looking to expand my experience in the area of restaurant management and hoteling, at a good position.

ACADEMIC QUALIFICATIONS:

Level

Year

Passed

Major

Subjects

Institution

High School

August 2015

Economics

Verdugo Hills High School

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September

2015 (Continued)

Economics

Glendlae Community College

WORK EXPERIENCE:

Worked as a server for 6 months at Blue Fish Restaurant from June 2015 till December 2015.

Currently working as a server at Sake Sushi Restaurant from 17 August 2016 (almost 3 Years).

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****************************

Robinson Crusoe Economy: A Simple Guide Framework For Modern Economies

Robinson Crusoe Economy: A Simple Guide Framework for Modern Economies

[Name of the Student]

[Name of the Institution]

Robinson Crusoe Economy: A Simple Guide Framework for Modern Economies

Introduction

Robinson Crusoe economy is a way to understand the complexities of economics in an easily perceivable manner, as it entails all the necessary elements that constitute an economy. ‘Robinson Crusoe’ is a novel written by Daniel Defoe and it was published in 1719. It is considered to be the first novel of modern features. Its publishing is also considered the start of the publishing industry. Robinson Crusoe, the protagonist of the story, disagrees with his parents and pursues his own dreams by setting out on an adventure that leads him to travel across the seas. On his way, the shipwrecks and he is thrown off on a remote island, where nobody can reach. There seems also no sign of already existing population. He is bound by fate to live there for about twenty-eight years at a stretch. He does not have any companion on the island. No ships sail by the island so that he someone can lend him a helping hand to sail up to his homeland. Therefore, he has to live there by surviving against all the odds of life.

The story of Robinson Crusoe is long and can be divided into different phases to understand the incidents in more detail. A considerable part of the story comprises his life spent before he sets out on the voyage. Then, there are details explained in the novel about his life after he is taken to his home country. However, to understand the economic basics from his life-story, the part of his life spent on the remote island is the most important of all, which is also the lengthiest part of discussion in the novel. It is on that island where Robinson relives the English culture and makes efforts to survive by deploying knowledge, skills, and culture of his country.

The life account of Robinson Crusoe is studied to make connections between simple and complex economies (Cheung, 2016). The main factors to be considered while discussing his life incidents include identification and explanation of scarcity he faces on the island. He make use of various goods on the island for his survival, which can be categorized as per the economic principles. Finally, the need for saving and investment can be understood by this story to apply these understandings in studying the practical situations of economic concerns. This implies that a good understanding of microeconomics can be achieved from the story. Further, principles of economic growth can be understood by the incidents happening to the protagonist’s life or situation (Lowe, 2017). The growth economics is employed mostly be developing or under-developed countries to indicate and establish paths for economic growth. These economies achieve success by utilizing the universal principles of saving and investment.

In Robinson Crusoe economy, entities involved are only a single individual. He is at the same time the consumer as well as the producer. His decisions will influence the outcomes of that particular economy (Pignol, 2017). Both the demand and the supply are made by this single individual. Further, Robinson himself is responsible for achieving the point of general equilibrium of the specific economy that exists on the island he presumes to own which. His management of the resources will enable him to produce a sufficient amount of goods needed. His ways to save goods and invest time appropriately will cause a scarcity-free economy on the island. His decisions to balance his demands, supply, and consumption will allow him to reach the general equilibrium that will ultimately ensure his survival on the island, or at least, secure a prosperous future for him.

The framework of Robinson Crusoe economy can be explained by considering certain factors and making some fundamental assumptions. The economy relates to the island where Robinson is living, and which is completely isolated from the rest of the world. This implies that the important function of a large economy, trade, is missing, which could be used to balance the demand and supply of goods (Cheung, 2016). Robinson Crusoe is the only economic agent present in this economy. He is the producer, consumer, and mediator. His sole decision will influence the chances of his survival. Since there is no trade on the island, it is essential that all goods needed by the consumer(s) will be produced using only the existing resources available on the island (Yu, 2016). These resources include land, natural waters, sunlight, and Robinson’s time. His health condition can affect the production of goods drastically.

The goods on the island can be categorized into two types: consumer goods and producer goods. Consumer goods include the coconut fruits that grow naturally on the island. The producer goods include certain tools, knives, and such other useful goods that will not be consumed directly by the consumer. Instead, these producer goods will help the producer to find or develop directly consumable goods (Toporowski, 2016). Robinson is the only person who will be responsible to maximize his profitability as well as utility. Profitability is related to his producer role, and utility will be considered in respect of his consumer role in the economy of the remote, isolated island. Robinson has to take care of many factors influencing the economy of that island.

Robinson lives for fifteen years all alone on the island and does not even catch a single glimpse of any human being (Rossi, 2017). Until this time, he alone constitutes the whole economy of that island. Later, he succeeds in rescuing one prisoner from the savages who are passing by the island. Now, the economy consists of two individuals. After a few years, Robinson and the prisoner, named Friday by him, succeed to rescue two more individuals from the seizure of savages. Among these two individuals, one is Friday’s father whereas the one is a Spaniard. All have to live there in order to secure their lives and ensure a good living. Therefore, they all have to consider the needs of the hour by applying the principles of saving and investment. People demand things and producers supply those goods for the end use of the customers (Richetti, 2019). The successful economy is one that achieves general equilibrium where demand and supply becomes equal or balanced, thereby making the economy free of scarcity.

Scarcity

Robinson Crusoe discovers on the island very soon that the circumstances are not favorable and he is going to suffer a great deal in case he is unable to manage things efficiently needed for his survival. He starts feeling hungry, his shelter needs arise. Since there is nobody else on the island, he is alone to make a positive or negative impact on his economic life. As per the story, the protagonist decides to demonstrate courage and live a life that is economically successful. He looks around what resources are available to him. He climbs up a coconut tree and finds fruit to his disposal. There are also streams of water that also makeup to be another resource for his living. Accessing fruits from the tree is not easy and it takes time. Crusoe analyzes the scarcity he faces and makes a plan to tackle the situation. Scarcity refers to the lack of goods to be consumed by users in economics, and it can be caused by inefficient use of resources available, and this implies that Crusoe has to be very cautious in utilizing the available resources (Andersson & Andersson, 2017). He is facing the utmost scarcity in his life. Robinson exclaims the scarcity he confronts in reference to an incident where he sees a tortoise on the isolated and remote island. He goes to the seaside where he finds a large tortoise or turtle. This incident happens after a long time since he is on the island. Crusoe narrates the incident saying that he has been unfortunate to see only a single turtle in all these days. “This was the first I had seen, which, it seems, was only my misfortune, not any defect of the place, or scarcity; for had I happened to be on the other side of the island, I might have hundreds of them, every day, as I found afterward, but perhaps had paid dear enough for them (Crusoe, 2011).”

Robinson Crusoe is facing scarcity of resources for production and, therefore, he must make strategy (in terms of economics) to maximize his profitability as well as utility. The available goods are coconuts and leisure with which he is supposed to make his living (Padfield, 2016). He can succeed in developing his little economy only if he is able to use his time in the best possible way and keep the usage of available consumer goods minimum. The main cause of scarcity on the island is the absence of all kinds of trade. No means to import goods is available to the economic agent.

The scarcity that Crusoe confronts on the island is not absolute, it is relative, and has been caused by certain economic factors. Scarcity is a quantifiable thing, and it increases or decreases in respect of the other factors that influence it. The scarcity exists in relation to the other goods available in an economy. To understand the scarcity in Robinson Crusoe economy, it is to be noted that Crusoe cannot spare all the time in producing bread for himself. This is the reason that Robinson has organized his time in the way that he finds enough time for rest and leisure activities. He goes in search of fruits or fish, and since he is alone on the island, and the consumer goods are scattered in the territory, it takes him almost twelve hours to collect sufficient food for him. A situation arises for him when he has options for sparing time for different pursuits or goods. For instance, if Crusoe opts for spending all his time to collect consumer good X, then he can collect 20 pieces of that commodity in one working day. If Crusoe opts for collecting two different goods per day, he will have to be contented with the decreased amount of each commodity. In this way, he will be able to collect 10 pieces of consumer good X and 10 pieces of consumer good Y. The relationship between different commodities would be linear in the second option. The opportunity cost will also be constant in this scenario, as the individual opts for getting an equal quantity of each commodity. The economic growth will be zero if Robinson consumes all the produced or collected goods and leaves nothing in balance to be used in the future. The scarcity indicates that economic growth is not possible due to limited availability or produced goods (Bullard, 2019). Scarcity can, therefore, be used as an indicator of ceased economic growth where the produced commodities equal the consumed commodity.

From the aforementioned discussion, it can be formulated that the scarcity coefficient will be positive if the produced goods happen to be scarcer in relation to the other goods. If the produced goods are in abundance relative to the other goods, it indicates that the scarcity coefficient would be negative. The third possibility entails the scarcity coefficient to be zero where no goods have become scarce and the state of balance exists in such economic condition. To sum up, it can be said that Robinson Crusoe economy entails three things that cause scarcity, that is, very limited time to produce goods, zero tradeoffs to contribute to the economic growth, and a little number of tools to be used as producer goods to make the consumer goods available. Another important aspect of this discussion is the relation of Robinson Crusoe's economy with the real world, today's economy to increase understanding of the subject avoiding the complexities involved. The scarcity in economies can be traced by the ratio of produced goods and consumer goods. The concept underlying this comparison has been elaborated above. Scarcity can be managed efficiently by making the ratio of both types of goods to be equal to one.

Types of Goods

Two types of goods are available for Crusoe that he can use for his benefit. The goods are scarce and he has to manage between them efficiently. Consumer goods are those that he will consume directly and which has direct benefit for him. Producer goods are those that can be used to produce consumer goods to be consumed for instant benefit of him. Coconuts (and fish) and running waters are the consumer goods that he can use for his economic benefit. The story of Robinson Crusoe tells the reader that he has been successful in bringing with him certain useful producer goods from the ship. He has a rifle to his disposal, and he possesses gunpowder as well. He has certain other tools that can help him fetch fruits from high trees and dig earth. Since he has been an individual of the civilized, developed society of his time, he has sufficient skills to recall his knowledge he gained all through his previous life. He is capable of reliving the culture he has left behind. He can survive by providing him with the basic necessities of his life. He has quoted in the story as well that he became happier living on the island than he had been in his homeland. Thus, he has producer goods as well to work for him and produce the consumer goods needed by him. The only thing he has to worry about is how he is going to manage the scarcity and survive on the island for a long time. All resources available needs his scrutiny and economic intelligence to remain sufficient.

In Robinson Crusoe economy, factors to be considered in his economy are varied in types. The land available to him is the island which he can use to produce goods and which is not in the custody of any other entity such that he finds himself restricted to use it for his purposes. He is, therefore, the landowner in this scenario. He has land to grow food for him but this activity will be affected by the time factor, as he has little time to use for his benefit. He has labor to run the economy, and this labor comprises only one man, which is none other than him. People do not live on that island who can provide labor for his land to be sewed and harvested. The capital goods or consumer goods include the raft that he uses for moving up to little distances in the water, rifle to be used for his safety, and some tools for everyday uses. He has, in fact, used also the rifle to send the savages away from his island who pass by the area and had prisoners. When Crusoe succeeds in rescuing various prisoners from the savages, he has gathered labor that will help him produce more consumer goods.

Robinson Crusoe makes effective use of different types of goods available to him on the remote island. He survives there for about twenty-eight years, by managing scarce resources and maximizing his economic benefits. He makes efficient use of capital goods available to him as well. During an attempt to bring the needed items to the island from the remains of the wrecked ship, he effectively uses his raft. He narrates in his story about the successful fetching of his cargo to the shore in these words, “As soon as I found water enough - for my raft drew about a foot of water - I thrust her upon that flat piece of ground, and there fastened or moored her, by sticking my two broken oars into the ground, one on one side near one end, and one on the other side near the other end; and thus I lay till the water ebbed away, and left my raft and all my cargo safe onshore (Robinson Crusoe—Chapter 4: First Weeks on the Island, n.d.).”

Robinson Crusoe's economy of goods can be simulated to understand complex economics of the real world. The real-world economics, however, differs from Robinson Crusoe economy in several ways, being similar in the basics. In real-world economies, tradeoffs exist, and goods are produced and distributed over distances of varying lengths. Economies share goods to make better use of the competitive advantages of one economy over the other. Life has become easier this sharing of consumer as well as producer goods. Time can be managed in a better way to be spared for more productive pursuits. People have become diversified and their needs and wants are also of dramatically varying types. Economies boost due to the increased lines of production and consumption. An enhanced level of flow of goods between economies makes it possible for economies to grow and thrive in competing business environments of the present time.

In Robinson Crusoe economy, goods are fewer and simpler and are employed in simpler projects. In the real world, the same types of goods have grown to an enormous variety of types and these goods (consumer and capital) determine the success of current economies. The rate at which goods are produced is affected by the labor employed and the sources available. Other factors affecting the production of goods include Robinson’s balance of efforts between the different types of commodities and variables. The state of equilibrium is achieved by the balance of inputs to the resulting effect by both types of goods. In the simpler context of Robinson Crusoe economy, equilibrium can be achieved conveniently because goods involved are very little in number, and managing their quantities is easier by the economic agent involved. This is not as easier in the modern economies where countless goods are exchanged every minute and transactions or tradeoffs are numerous. People have needs and wants and their necessities are the determining factor of the success or failure or the economy. No two persons have the same demands and this implies that the economists have a wide, unlimited scope of devising ways and practices to improve the economies.

Saving and Investment

Robinson Crusoe's economy is an economy of scarcity that has been transformed into a prosperous economy by the protagonist over time. Robinson being left alone on the island has to adopt the strategy of saving stocks to survive longer. To understand saving and investment in Robinson Crusoe economy, it is important to know the terms beforehand. Saving refers to keeping a certain amount of money aside that has been earned in a tradeoff or business activity. Saving can also refer to the storage of goods that are left unused in the current economic cycle to be used for some useful purpose in the future. People are always in the habit of saving their benefits and rights. They must also understand the need of saving goods that will keep them safe and well-doers in the context of their work history. The term investment refers to the utilization of available resources that can be used by other capable entities to bring collective good to the whole economy. All those factors that affect the economic cycle also impose negative or positive impacts on the effective use of resources.

Robinson Crusoe has limited sources that he can use to survive. Robinson Crusoe makes great effort in making the consumer as well as producer goods. He describes the way he makes efforts at one place in the novel this way, “I spared no pains, indeed, in this piece of fruitless toil, and spent, I think, three of four weeks about it (Grey, n.d.).”

His situation can be understood by referring to the classic example given in this regard. If Robinson needs one hour to fetch a coconut from the tree, he can collect twelve pieces of coconuts per day, provided that he works for twelve hours in a day. In order to increase his profitability or utility of goods, he has to indulge in saving or investing practices. Now, he can save fruits only to the extent which he can afford easily to maintain his health and be able to conduct daily activities normally. If he saves two pieces of coconut daily, he can save up to sixty pieces of fruit for his disposal. This saving can help him sustain during the periods of turmoil or decreased activity. He can survive for five days minimum, and the limit can increase depending on his daily consumption of the fruits. All the possible activity that he can put forth in saving option is to keep aside a few pieces of goods as a stock to be used in hard times when he is not able to work for any reason. The other thing Robinson can do to increase his economic benefit is that he can invest more hours in producing consumer goods. However, this can be really hectic for him because this practice will harm his health and will not allow him to carry on other activities of life, eventually disrupting his work-life balance. Therefore the better option for economic growth in Robinson Crusoe's economy is to save goods as much as possible by the economic agents involved.

The following graph can be used to illustrate the relationship between investment and produce in Robinson Crusoe economy.

Coconuts

Days

The graph represents the relationship that exists between days of work and number of fruits involved in Robinson's economy. This graph shows that the relationship between investment and produce is influenced by taking effective measures. There exist three possibilities in this situation. First, Robinson passes time doing no work at all, and does not collect any coconuts ever. This would result in a horizontal red line that shows that time passes but zero economic benefit has been achieved. Second, Robinson works for 25 days and gathers 50 pieces of coconuts. This has been represented by the orange line in the graph. Third, he works for only 12.5 days, and is able to gather the same number of fruits as he could in the previous situation. Robinson has been able to reach this level of efficiency only by making savings. He has been able to do the savings by reducing his daily consumption of fruits. He is now using only half of the quantity of fruits he has been using earlier. This shows that economic growth can substantially increase by following the golden principles of saving goods of economic value. All those economies that exist today can benefit from this principle. People can make their lives much better by making as much savings in their expenses as possible. Countries can achieve economic success by leveraging their goals in respect of saving economic goods.

Robinson Crusoe's economy has the potential to indicate certain other things that can help increase economic output and growth. The reduced consumption of consumer goods will not only increase the stocks of this economy but also provide other options to increase the productivity of the economy. Suppose, Robinson takes down only half of the number of coconuts every day as compared to the number of coconuts he has been fetching earlier for his daily use. This initiative will increase the remaining capital he has to use for producing goods. The working hours spent to produce goods are now half of the time spent previously during the production process. This spare time can be used to find out other productive ways to increase economic growth. Robinson can use his mind, or in economic terminology, he can use the available technology and expertise to introduce new efficient ways of producing goods. He can build some tools or devices or machines to make the production process easier. For instance, he makes a huge pile of several pieces of wood or a kind of ladder to climb up the trees easily. This can reduce his effort and save his energy. He can have spare time to think more ideas of growing his specific economy.

In relation to the modern economies, it can be understood that organizations can assign personnel and resources to put into the development efforts. Research and design departments can be improved by dedicating resources and funds. These practices can increase the output of the production processes in the firms. Inventory control can lead to increased savings as well. Cost control can help companies to spare funds for alternative ways of economic growth. Economies thrive by the efficient use of resources and labor. The combination of labor and investment coupled with the practice of saving can ensure the success of economies in the present world of business.

Conclusion

Robinson Crusoe's economy has been widely used by economists to make the complex economic models of present-day simpler to understand and use for development and growth of economies. Robinson Crusoe economy help to understand the foundations of economics. This understanding can be applied to become familiar with more complex economies. Consumer goods and capital goods remain the common factors in all economies. The relationship between the two types of goods should be understood to increase the opportunities available in economies. People can contribute to the growth and development of economies by saving goods and investing in useful pursuits. No economy can survive without implementing technologies and advancements so that the production processes could be improved to a considerable extent. Scarcity will remain the common feature of all economies as it is the natural component of every economic system, and states can only find ways to deal with it efficiently. Moreover, scarcity of goods can be transformed to the equilibrium point by efficiently using resources and opportunities. Continuing to stick to the traditional ways of producing goods cannot contribute to economic growth at all. All industries must employ updated systems and the best resources to get the desired outcomes.

References

Andersson, Å. E., & Andersson, D. E. (2017). Time and capital in economic doctrines. In Time, Space and Capital. Edward Elgar Publishing.

Bullard, R. (2019). Daniel Defoe’s Robinson Crusoe: A Gazetteer. Etudes Anglaises, 72(2), 131–134.

Cheung, S. N. (2016). Economic organization and transaction costs. The New Palgrave Dictionary of Economics, 1–5.

Crusoe, R. (n.d.). CHAPTER I - START IN LIFE. Robinson Crusoe, 487.

Grey, G. (n.d.). Robinson Crusoe—Read Online. Global Grey. Retrieved January 5, 2020, from https://www.globalgreyebooks.com/read-online/robinson-crusoe/robinson-crusoe-read-online.html

Lowe, A. (2017). On economic knowledge: Toward a science of political economics. Routledge.

Padfield, S. J. (2016). Socio-Economics: Challenging Mainstream Economic Models and Policies. Akron L. Rev., 49, 539.

Pignol, C. (2017). Which economic agent does Robinson Crusoe represent? In Economics and Literature (pp. 79–95). Routledge.

Richetti, J. (2019). Eurocentric Crusoe: The Farther Adventures of Robinson Crusoe. Etudes Anglaises, 72(2), 213–224.

Robinson Crusoe—Chapter 4: First Weeks on the Island. (n.d.). Retrieved January 5, 2020, from https://americanliterature.com/author/daniel-defoe/book/robinson-crusoe/chapter-4-first-weeks-on-the-island

Rossi, C. (2017). The Crusoe condition: Making within limits and the critical possibilities of fiction. The Journal of Modern Craft, 10(1), 19–35.

Söllner, F. (2016). The Use (and Abuse) of Robinson Crusoe in Neoclassical Economics. History of Political Economy, 48(1), 35–64.

Toporowski, J. (2016). Microfoundations, Minsky and classical political economy. Review of Political Economy, 28(1), 92–98.

Yu, T. Y. (2016). Record Keeping as a Tool for Improvement in Robinson Crusoe. 근대영미소설, 23(1), 121–141.

Short Paper

Economics

[Name of the Writer]

[Name of the Institution]

Economics

Introduction

When one talk about the way regulations are carried out in the economy, the most important factor is that how the government interventions and regulations are going to impact the marketplace. Despite the fact that the intention of the government might be good, the major issue is that how it is going to be made sure that these regulations are going to be good enough when it comes to tackling the major issues that are faced in the marketplace. One of the reasons that the government interventions tend to hamper the marketplace is due to the fact that at times, they get into the way how self-correcting mechanism is going to work at the marketplace and how it would consequently bring about the change in the marketplace. So, all these factors tend to play a role as far as the way market interventions are going to work at the particular point of time. In this paper, with the help of the different articles, it would be seen that how market intervention at any point of time has negative consequences for the way markets are going to work.

Minimum Wage And Government Intervention

There is lot of empirical evidence that tends to suggest the fact that how the minimum wage requirements are not doing any good at the marketplace. The first thing that is needed to be understood here is that how the minimum wage tends to bring about the disbalance in the market due to the way changes are going to be taking place at the particular point of time. The labour market specially in most of the places tend to work in the way how supply and demand of labour is going to be managed at the particular point of time. What happens is that the labour supply and demand is one of the things that brings about the determination of the wage rate. If there is going to be any gap in supply and demand for the labour, the market self-correcting mechanism is going to be making sure that at the appropriate wage rate. The market itself is going to bring itself into the correct place. Furthermore, the other major aspect of the determination of the wage rate is that how it manifests into the higher or labour level depending on the skill level and other determinant of the people at the given point of time. These things are going to play a role in the determination of the wage rate.

How Government Disrupts The Wage Rae And Economy

Unfortunately, what happens is that if there is intervention by the government, the entry level jobs are making sure that the there is enough incentive in terms of the businesses that they hire incremental labour at the greater pace. It is quite clear that the business is going to hire as per their needs and requirement and if there is a case that the labour that they are demanding are not asking for an appropriate rate, then there is going to be quite a way differential labour treatment is going to be carried out. The other aspect of the whole thing is that how it is going to be made sure that all the key determinants of the people in terms of the way labour requirement are going to be shaped up. If the demand for the labour is not there, they are not going to be hiring them. And if they see that they can do away with the low skilled jobs with automation and other mechanisms through which the reduction of the cost is going to be possible. So, all these aspects are going to be taking shape at the given point of time in terms of the way labour management is going to be done. The problem with the minimum wage rate is that they are providing businesses with the incentives that they should not be hiring the low skilled labour and instead they should be investing in the technology to ensure that they are able to mitigate the incremental cost that comes with the increased usage of the lower skilled level. What minimum wage is doing is that it is hampering the labour market instead of acting in the best level of the people. This is the classic example of why the government intervention tends to hamper the way things are supposed to be done.

Usage Of The Fossil Fuels And Its Benefits

It is a well-known fact that the usage of the fossil fuel is something that is quite disruptive for the environment. The major problem with the usage of the fossil fuel is that not only it is sustainable, the benefits that it is providing in term so the energy need of the people are much lower as compared to the social cost that people have to pay for it. It all started with the industrial revolution in the past. The fossil fuels provided an important backdrop to one of the most important social change and due to that social change, there has been an impending change that was witnessed in terms of how the society operated. We witnessed the massive industrialization, as well as the fact that how more and more people started to move towards the urban centres. There was a social drawback to the way these things took shape. Most of the people moved towards the city and as with the passage of time, people started to realize the social harms that the fossil fuels are supposed to be working at the given point of time. The need for improved fuel efficiency was obvious back in 1975. Memories of the energy crisis during the preceding two years were still vivid, and people were concerned that they might again have to wait in long lines to buy gasoline at inflated prices. That is when the federal program known as the Corporate Average Fuel Economy (CAFE) standards was established -- regulating the minimum gas mileage required for new cars and light-duty trucks sold in this country.

Government Intervention In Terms Of The Usage Of The Fossil Fuels

There are two lines that government is working on when one talks about how the social benefits are going to be seen. There are alternative energy programs as well as the effort to bring on board more environmental regulations. Both these programs have faced mixed results at the moment. The environmental programs are not working out due to the aid constraints while on the other hand, the alternative energy programs were far from ideal to operate the operation of such scale. Given this trend, it should come as no surprise that the nation's overall fuel economy has been slipping. And with this slippage, the worry over U.S. dependence on foreign oil, as well as concerns about the contribution of vehicle emissions to global warming, continues to mount.

Conclusion

In the hindsight, it can be said that the government intervention at any level is going to work out well. Due to that, there are problems and issues in terms of the way things are supposedly bringing about a positive change. There is a need to ensure that market forces that are at work must be allowed to drive the change so that the situation improves.

References

https://www.realclearpolitics.com/2017/04/04/minimum_wage_should_be_called_the_robot_employment_act_406833.html

https://www.wsj.com/articles/the-social-benefits-of-fossil-fuels-far-outweigh-the-costs-1529258294

Special Project

Special Project

[Name of the Writer]

[Name of the Institution]

Special Project

Abstract

The objective of this paper is to discuss the causes of the Greek economic crisis from 2010 to 2017 using the macroeconomic theory of aggregate supply and aggregate demand. Also, it will evaluate the methods that are used by the Greek government in order to rectify the issues and how their policy implementation theoretically differs from the practical outlook.

The economic policy distortion is kept on spreading and reproducing usually because of the theoretical concept of disorientating sources. We will also discuss in this study about the implementation of Greek government exclusion policy of economy's program called as "dual deficit program" which is the amalgamation of internal devaluation and the austerity and we will see how this program failed. Greece is still facing creditworthiness high risk, lackluster growth in export and an uncertain macroeconomic situation. The failure’s root cause can be found arguably in the measures that are detrimental to austerity performance on the private sector and its repercussions in the ensuing aggregate economy. Finally, our aim in this paper is to look into the macroeconomic figures available and making the predictions about the recession approximation given by the international organizations, research centers of Greece, and the government of Greece. Suggesting finally that the decline prediction given by them in recent years in real GDP that was falsely optimistic.

Discussion

right2421255The graph highlights the fact that given prices drop (or unit costs of labor) can happen with a flat curve of AS with negative large gap of the output, or the steep curve of AS and negative small gap of output. We can say in other words that just because of the falling of price levels, it cannot be asserted that it is full employment approach. In May 2014, it is a fact that the IMF forecasted the gap output for Greece at -9.3% of GDP potential. It can be said in other words that deficiency in demand is the main factor in understanding the program perversity that is considered nowadays.

So the main point to notice is that in the first phase of the crises, the level of supply was increased in huge numbers in order to increase the level of the output. But due to the low level of demand, consequently, the level of the demand price decreases in the first phase.

In the second phase when the prices have been decreased, there has been no benefit in the production so investment by the people is low therefore it decreases the income which has a consequence of a decrease in the demand.

The goal principally in the application by the Economic Adjustment Programmes (EAPs) that is applied in Greece was to eliminate the so-called economy's "dual deficit problem" by the amalgam of internal devaluation and the austerity measures. This prescription of the policy was expected originally to get Greece out from the public debt and get it back on tracks of sustainability and boost the productive sector of Greece competitiveness, thereby enhancing growth that is export-led. Whereas the policy agenda implementation has a resulting unit labor costs and fiscal deficit sharp reduction, Greece is still facing a high risk of creditworthiness, export growth lackluster, and a macroeconomic uncertain outlook. In this paper, we will discuss the creditors' failure of policy agenda in profound transformations view that it has let loose upon the sectoral balances of the economy and implication of macroeconomic process.

The vital ingredient of the Greece reform program is three. Fiscal contraction to massive deficit budget reduction and eventually payment of the debt; wages and pension reduction, and other increase in the costs to make the Greek industry competitive. Also, reforms of structural nature are included to increase productivity and modernizing the Greek economy. The institutional lender's expectation was that the small negative multipliers by the fiscal contraction would have result in "internal devaluation" that eventually would result in unit labor cost reduction and would increase exports. Also, the expectation was to help domestic demand and increase in productivity through structural reform, wages and expectation improvement about the prospects in future, giving Greece access to cheaper and more finances for output growth and investment.

In practice, bigger negative multipliers that were led by fiscal austerity than IMF estimated (as was acknowledged itself by the IMF) and more output fall than was expected(Alogoskoufis, 2012). The efforts of internal devaluation did not help the right way to the exports but instead the reduction in the wages, combined with rising prices, further brought negative multipliers through domestic demand fall. With barriers to fall entry in unit labor costs and wages and sticky prices so far have contributed in recession instead of making it reverse. In circumstances as such, it instills more sense to first target the market product reforms, which would make an improvement in the flexibility of prices and competitiveness in the structural aspect of the Greek economy.

The simultaneous recession presence and price relative stability that is witnessed in the 2012 second half, ought to leftward shift attribution of the schedules of aggregate supply and aggregate demand.

The initiatives are thus suggested in order to end the recession could be in either front carried out (Ioannides & Pissarides, 2015). The distorted Greek economy's structure, especially its economic activity concentration in small group hands, inflexibility introduction in prices, so the wage cuts and fiscal austerity have a consequence in demand catastrophic fall. IMF features of fiscal multipliers underestimation; the demand fall is behind the recession depth and unemployment rise. The problem of Greece is both in supply and demand. The problems in supply are present in the country since its acceptance in 1981 in the EU; on the other hand problems in demand is caused by the wage cuts and austerity have added to the problems of supply, making the matter worse. Both the wage costs fall and productivity fall was as a result of investment and aggregate demand collapse. In 2014 euro area fixed capital formation was at GDP 19 percent, which is from pre-crisis slightly below levels, in Greece it slumped from larger than 20 percent in the years from pre-crisis to 16.3 and 8 percent in 2009 and 2014 respectively, with construction residential accounting for collapse in large proportions(Kiriakidis & Kargas, 2013).

In economies such as that of Greece, fall in prices is not easy and the aggregate demand decrease is brought about the decrease translation of wages into an aggregate activity contraction and unemployment. Greece wage reduction was reflected in large profit margin increase rather than price reductions.

Conclusion

After years of wide-ranging reforms from neoliberalism idea implementation and painstaking austerity, the economy of Greece is continuously encompassing in a situation of highly unfortunate protracting deflation, uproaring unemployment and instability in the finance sector, with quick and robust prospect recovery still is highly uncertain and remain in gloomy conditions (Lse.ac.uk., 2017). The duration and the depth of the Greek crisis highlight vividly that only the austerity as a measure to regain economic fortune has failed both on theoretical front and as well as a policy option to deliver the outcomes that were promised.

References

Alogoskoufis, G. (2012). Greece’s sovereign debt crisis: retrospect and prospect.

Kiriakidis, M., & Kargas, A. (2013). Greek GDP forecast estimates. Applied Economics Letters, 20(8), 767-772.

Ioannides, Y. M., & Pissarides, C. A. (2015). Is the Greek crisis one of supply or demand?. Brookings Papers on Economic Activity, 349-383.

(2019). Lse.ac.uk. Retrieved 31 May 2019, from http://www.lse.ac.uk/europeanInstitute/research/hellenicObservatory/CMS_20pdf/Publications/Greece-Macro-Monitor-Greece-2017-Economic-Outlook-1-March-2017.pdf

State Of The Economy Essay

Your Name

Instructor Name

Course Number

Date

State of the economic essay

This essay will be demonstrating the overall understanding of economic statistics and this also aims to carry an analysis of the current data concerning the health of the United States.

Introduction

The statistical study in the economic activity is termed as the economic indicators which include the analysis of economic performances and predictions about future performances and outcomes. Several indices are included as economic indicators such as earning reports, and summaries written for different economies. The economic indicator is data based on the macroeconomic scale which is used for the interpretation of current and future possibilities of investments by the analysists. The economy may be also analyzed and judged with the help of economic indicators. While these indicators may be set according to the investor's choices. The data of the economic indicators are widely followed by the government and non-governmental organizations. These are released according to a period that allows investors to prepare a final plan and to collect certain information. There are certain indicators of economics which include a leading indicator, lagged indicator, and contemporaneous or coincident indicator. Leading indicators are supposed to change the economic conditions before the economy changes, while this helps the policymakers to observe and assume the expected changes in the economy. Lagged indicators occur after the happening of a shift in a particular target variable. This may be defined as that indicator which is meant to confirm a pattern that is still in the process. While the coincident indicators occur at the exact time and this helps to clear an understanding of the economic state. The business cycle depends upon the rise and fall in the production of material goods and services delivery in a particular economy. Different stages in the business cycle include peak, recessions, depression and trough and recovery. The growth of the economy depends on the expansion while the economy declines because of the recession. Proceeding the discussion with the business cycle of the United States economy business cycle, the economic growth of the US started expanding during the era of industrialization. The US has the National Bureau of Economic Research which determines the yearly dates of the business cycle. This includes the production from industries, employment rates and income of people.

Phases in the business cycle

There is a total of four stages in the business cycle which include peak, expansion, contraction, and trough. The first stage of the business cycle is the expansion which is characterized by the continuous increase in employment, economic growth, and an increase in the prices due to upward pressure. The peak is considered to be the highest peak during which the economy can produce maximum output, employment opportunities or full employment opportunities and this also introduces permissible inflationary pressures on the market prices. The third one is the contraction, in which the economic growth contracts employment opportunities decreases and the pressures on the prices subside. While the lowest stage at which economy hits the bottom and after this the next phase may be a contraction or expansion.

The United States is in the phase of expansion because the employment opportunities are increasing and the economic growth is also rising upwards. The economy of the United States will increase when it will allow other regions to start a trade to the area because this will increase the inflow of the economic sources. More economies with invest in the economies of the United States, than there will be more economic growth. The last trough in which the United States was during 2009, this was the peak-trough but after this year the business cycle moved towards the expansion ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"fLBqluiW","properties":{"formattedCitation":"({\\i{}US Business Cycle})","plainCitation":"(US Business Cycle)","noteIndex":0},"citationItems":[{"id":1206,"uris":["http://zotero.org/users/local/F0XOCTdk/items/C4CURUJW"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/C4CURUJW"],"itemData":{"id":1206,"type":"webpage","URL":"https://www.nber.org/cycles/cyclesmain.html","shortTitle":"US Business Cycle","accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (US Business Cycle).

Gross Domestic Product

Gross Domestic Product helps to measure the final values of goods and services that are produced within the boundaries of countries and states. This measures the output of the economy and this is also considered as the measurement of the total size of an economy. The economy of the United States is expanding, so this can be assumed that the GDP rate would be higher for the United States. However, the Gross Domestic Product of the United States during the half of the quarter of this present year is $5, 385,526 million. The rate of GDP is 2.1 percent, while it was 2.9 percent during 2018.

Inflation

Inflation is measured by the economists with the formula which is

Inflation= [Price(year 2) - Price(year 1)/Price (year 1)]*100.

The Consumer Price Index in recent years has increased and the inflation rate of the United States. Several people are affected due to higher-costs of living. People living in the United States are largely impacted by the changes in the CPI, however, they can use the CPI index to adjust their payments and prices ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"pmrVD3N8","properties":{"formattedCitation":"({\\i{}Consumer})","plainCitation":"(Consumer)","noteIndex":0},"citationItems":[{"id":1212,"uris":["http://zotero.org/users/local/F0XOCTdk/items/PEJI3SZU"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/PEJI3SZU"],"itemData":{"id":1212,"type":"webpage","title":"Consumer : U.S. Bureau of Labor Statistics","abstract":"Consumer","URL":"https://www.bls.gov/audience/consumers.htm","shortTitle":"Consumer","language":"en-us","accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Consumer). The CPI for urban consumers has increased to 0.3 percent during the seasons while the yearly percentage is 2.1. The latest news about CPI in the United States is that the economy is narrowing down the tensions regarding trade and recession, however, the largest gain of the year for CPI was 0.4 percent ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"30V083Ag","properties":{"formattedCitation":"(\\uc0\\u8220{}US Consumer Prices Increase More than Expected in October\\uc0\\u8221{})","plainCitation":"(“US Consumer Prices Increase More than Expected in October”)","noteIndex":0},"citationItems":[{"id":1214,"uris":["http://zotero.org/users/local/F0XOCTdk/items/VFZ7LUHW"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/VFZ7LUHW"],"itemData":{"id":1214,"type":"webpage","title":"US consumer prices increase more than expected in October","container-title":"CNBC","abstract":"The Labor Department said on Wednesday its consumer price index increased 0.4% last month as households paid more for energy products, healthcare, food and a range of other goods. That was the largest gain in the CPI since March and followed an unchanged reading in September.","URL":"https://www.cnbc.com/2019/11/13/us-consumer-prices-rise-0point4percent-in-october-slightly-higher-than-estimates.html","language":"en","issued":{"date-parts":[["2019",11,13]]},"accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“US Consumer Prices Increase More than Expected in October”).

Unemployment

Unemployment is measured by unemployed individuals/ the total number of employed persons. It is not a perfect measure for joblessness because it does not include the daily based workers, it only includes those who work on larger scales. The unemployment rate of the United States is 3.6 percent, this rate is changed a little to 3.5 percent ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"Pz0usavT","properties":{"formattedCitation":"({\\i{}Unemployment})","plainCitation":"(Unemployment)","noteIndex":0},"citationItems":[{"id":1224,"uris":["http://zotero.org/users/local/F0XOCTdk/items/R84ES3NS"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/R84ES3NS"],"itemData":{"id":1224,"type":"webpage","title":"Employment, Hours, and Earnings from the Current Employment Statistics survey (National) Home Page","URL":"https://www.bls.gov/ces/","shortTitle":"Unemployment","language":"en-us","accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Unemployment). This has decreased because of more employment opportunities and earning sources in the market.

Monetary policy

In every country, there is a monetary authority that controls the interest rates on each borrowing and supply of money by the country, while this mainly targets inflation. The monetary policy is measured by the central bank and it takes action. The Federal Open Market Committee shows they the market and economic activities have been raised ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"uhDg05ty","properties":{"formattedCitation":"(\\uc0\\u8220{}Federal Reserve Issues FOMC Statement\\uc0\\u8221{})","plainCitation":"(“Federal Reserve Issues FOMC Statement”)","noteIndex":0},"citationItems":[{"id":1216,"uris":["http://zotero.org/users/local/F0XOCTdk/items/G82W76QX"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/G82W76QX"],"itemData":{"id":1216,"type":"webpage","title":"Federal Reserve issues FOMC statement","container-title":"Board of Governors of the Federal Reserve System","abstract":"Information received since the Federal Open Market Committee met in October indicates that the labor market remains strong and that economic activity has been","URL":"https://www.federalreserve.gov/newsevents/pressreleases/monetary20191211a.htm","language":"en","accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Federal Reserve Issues FOMC Statement”). This is caused due to an increase in the number of employment opportunities.

Fiscal policy

Fiscal policy is the adjustments in the spending levels of the nation and adjustments in the tax rates so that the economy of the nation may be monitored. The current state of the United States Congress in terms of policy has adopted the contractionary fiscal policy. The US has limited the number of imports and other economic investments. The state is making changes within the country. The budget of the US may be impacted by the presidential budget while it is expected that the administrative proposals may have major impacts such as the budget deficit would be estimated as $1.5 trillion ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"6RiLicT5","properties":{"formattedCitation":"({\\i{}President\\uc0\\u8217{}s Budget})","plainCitation":"(President’s Budget)","noteIndex":0},"citationItems":[{"id":1222,"uris":["http://zotero.org/users/local/F0XOCTdk/items/P9DEGIDC"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/P9DEGIDC"],"itemData":{"id":1222,"type":"webpage","title":"An Analysis of the President’s 2020 Budget | Congressional Budget Office","URL":"https://www.cbo.gov/publication/55195","shortTitle":"President's Budget","issued":{"date-parts":[["2019"]]},"accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (President’s Budget).

International trade

International trade is referred to as the exchange of capital, and services beyond borders. The United States of America is engaged in several international trades with a majority of countries in the world. The US is well aware of the importance of international trade in the provision of employment and in raising living standards ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"4F8RQDE0","properties":{"formattedCitation":"({\\i{}OEC - United States (USA) Exports, Imports, and Trade Partners})","plainCitation":"(OEC - United States (USA) Exports, Imports, and Trade Partners)","noteIndex":0},"citationItems":[{"id":1220,"uris":["http://zotero.org/users/local/F0XOCTdk/items/4JPE9TPN"],"uri":["http://zotero.org/users/local/F0XOCTdk/items/4JPE9TPN"],"itemData":{"id":1220,"type":"webpage","title":"OEC - United States (USA) Exports, Imports, and Trade Partners","URL":"https://oec.world/en/profile/country/usa/","language":"en","accessed":{"date-parts":[["2019",12,17]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (OEC - United States (USA) Exports, Imports, and Trade Partners). The US has to adopt new policies to expand its economy by starting new trading destinations all over the world, it should not adopt the protectionist approaches because the economy will not grow in the international market. It has to initiate trading policies with other countries and this will make a positive impact on the nation of America. Because they may also be able to earn and get employment opportunities and improve their living standards. The neighboring countries and other countries from all over the world may be able to find a better lifestyle. The United States should start with developing countries which are in a phase of making investments to develop their economies.

Conclusion

The economy of the United States is expanding because of the creation of employment opportunities within the state, people have become more employed and they have started earning more. The United States has to increase future trades shortly, so that, it may be able to expand its economy on the international market. In these recent years, the economy of the United States has increased and it has shifted from trough to expansionary business cycle, which is a positive aspect.

Works Cited

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY An Analysis of the President’s 2020 Budget | Congressional Budget Office. 2019, https://www.cbo.gov/publication/55195.

Consumer : U.S. Bureau of Labor Statistics. https://www.bls.gov/audience/consumers.htm. Accessed 17 Dec. 2019.

Employment, Hours, and Earnings from the Current Employment Statistics Survey (National) Home Page. https://www.bls.gov/ces/. Accessed 17 Dec. 2019.

“Federal Reserve Issues FOMC Statement.” Board of Governors of the Federal Reserve System, https://www.federalreserve.gov/newsevents/pressreleases/monetary20191211a.htm. Accessed 17 Dec. 2019.

OEC - United States (USA) Exports, Imports, and Trade Partners. https://oec.world/en/profile/country/usa/. Accessed 17 Dec. 2019.

“US Consumer Prices Increase More than Expected in October.” CNBC, 13 Nov. 2019, https://www.cnbc.com/2019/11/13/us-consumer-prices-rise-0point4percent-in-october-slightly-higher-than-estimates.html.

https://www.nber.org/cycles/cyclesmain.html. Accessed 17 Dec. 2019.

State Of The Economy Final Draft

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An Overview of the American Economy

Introduction

The United States is the hub of many international and multi-national businesses, and it can be considered as the leader of the innovation in this age of industrialization. The economy of the US attracts not only businessmen from the entire world, but thousands of families also migrated to the US to obtain benefits from the American economy. The economy of the US is the world's largest economy, with a GDP of 21439.45 billion USD. This is a developed and a mixed economy in which both the private and public sectors have their roles.

This research paper will focus on the representation of many key indicators of the American economy and will also try to figure out their impact on different agents of the economy.

Business Cycle

The business cycle describes the overall economic situation of an economy, and it has four different phases. A peak of a business cycle is characterized by the highest economic achievements for a country. GDP sees the highest benchmarks, and the economy operates at full employment levels. A slight pressure on the prices can also be seen in this phase. After operating on the peak levels of economic activity, generally, an economy enters into the next phase of a business cycle that is a contraction. In the phase, the economic activity gradually shrinks. The growth rate slows down, and unemployment tends to increase. A continuous contraction leads an economy to the next phase of a business cycle, which is called trough. The economic activity in this phase seems to be stagnant. All economic indicators show depressing figures. After some time of trough, the economy starts to show the signals of revival, and the growth rate tends to increase. This phase of a business cycle is called the expansion.

The American economy is the phase of expansion since June 2009 ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"nqiNSLft","properties":{"formattedCitation":"({\\i{}US Business Cycle})","plainCitation":"(US Business Cycle)","noteIndex":0},"citationItems":[{"id":1110,"uris":["http://zotero.org/users/local/s8f0QVnP/items/L654YLLB"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/L654YLLB"],"itemData":{"id":1110,"type":"webpage","title":"US Business Cycle","URL":"https://www.nber.org/cycles/cyclesmain.html","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (US Business Cycle). This expansion was started after the end of the Great Recession and was a turning point in the business cycle.

Gross Domestic Product (GDP)

GDP is an economic indicator, and it shows the overall performance of an economy. GDP can be measured by getting the sum of the market price of all currently produced goods and services within a country. The economy of the US is the world’s largest economy following by china. The current GDP level of the American economy is 21439.45 Billion USD at current prices ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"GIzPb1T1","properties":{"formattedCitation":"(\\uc0\\u8220{}United States - Gross Domestic Product (GDP) 2024\\uc0\\u8221{})","plainCitation":"(“United States - Gross Domestic Product (GDP) 2024”)","noteIndex":0},"citationItems":[{"id":1112,"uris":["http://zotero.org/users/local/s8f0QVnP/items/W2JK37VF"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/W2JK37VF"],"itemData":{"id":1112,"type":"webpage","abstract":"The statistic shows the gross domestic product (GDP) of the United States from 1984 to 2018, with projections up until 2024.","container-title":"Statista","language":"en","title":"United States - Gross domestic product (GDP) 2024","URL":"https://www.statista.com/statistics/263591/gross-domestic-product-gdp-of-the-united-states/","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“United States - Gross Domestic Product (GDP) 2024”). The annual GDP growth rate was 2.9% in 2018 that can be considered as good ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"oUOEtGhN","properties":{"formattedCitation":"(\\uc0\\u8220{}U.S. - GDP Growth by Year 1990-2018\\uc0\\u8221{})","plainCitation":"(“U.S. - GDP Growth by Year 1990-2018”)","noteIndex":0},"citationItems":[{"id":1114,"uris":["http://zotero.org/users/local/s8f0QVnP/items/VP2JSFZT"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/VP2JSFZT"],"itemData":{"id":1114,"type":"webpage","abstract":"This graph shows the U.S. Real GDP growth by year from 1990 to 2018. The Real GDP of the United States increased by 2.9 percent in 2018.","container-title":"Statista","language":"en","title":"U.S. - GDP growth by year 1990-2018","URL":"https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} ("U.S. - GDP Growth by the Year 1990-2018"). It is expected that the economy of the US will continue to grow at a growth rate of around 2% annually for the next four to five years.

Consumer Price Index (CPI)

Inflation can be explained as an increase in the price of goods and services. There are many ways to measure the inflation rate in the economy. CPI is one of the important measures of inflation. In the US, the CPI increase by 0.3% in November this year ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"Aq1oE3up","properties":{"formattedCitation":"({\\i{}Consumer Price Index Summary})","plainCitation":"(Consumer Price Index Summary)","noteIndex":0},"citationItems":[{"id":1116,"uris":["http://zotero.org/users/local/s8f0QVnP/items/6ZNJG6EW"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/6ZNJG6EW"],"itemData":{"id":1116,"type":"webpage","language":"en","title":"Consumer Price Index Summary","URL":"https://www.bls.gov/news.release/cpi.nr0.htm","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Consumer Price Index Summary). This increase was measured at seasonally adjusted rates, and this increase in prices was for all urban consumers. The annual increase in the CPI was 2.15 from November 2018 to November 2019.

Unemployment.

A person is called the unemployed person who wants to do a job but cannot find a job. The unemployment rate is calculated as the total number of unemployed persons as a percentage of the total labor force in an economy. Every jobless person cannot be considered as an unemployed person as there can be different reasons that can become a source of joblessness for an individual. There can be voluntary unemployment in the economy, as well. There also can be structural, frictional, and seasonal unemployment. Underemployment is another shape of unemployment. The unemployment rate in the US was at 3.5% in November this year ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"QBLMSuAU","properties":{"formattedCitation":"({\\i{}Employment Situation Summary})","plainCitation":"(Employment Situation Summary)","noteIndex":0},"citationItems":[{"id":1118,"uris":["http://zotero.org/users/local/s8f0QVnP/items/P9CKKG67"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/P9CKKG67"],"itemData":{"id":1118,"type":"webpage","language":"en","title":"Employment Situation Summary","URL":"https://www.bls.gov/news.release/empsit.nr0.htm","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Employment Situation Summary). The unemployment rate in the US is continuously decreasing since 2010. The current unemployment rate of the US is the lowest in the last thirty years.

Monetary Policy

Monetary policy is the tool that is used by the FED in the US to manage the demand side economy. The key purpose of the monetary policy is to obtain and sustain the optimal level of money supply in the economy. There are different tools that are used by the FED to achieve its objectives. Interest rate, open market operation, discount rate, and reserve requirement are the four major tools that are used by the FED to control the money supply in the economy. The FED decreases its interest rate three times in 2019, and the current interest rate in the economy is 1.5%. Any change in the interest rate has many effects on the economy. The decrease in the interest rate can boost the economy by increasing investment levels. It can also affect employment and inflation in an economy. The interest rate also has its effect on the exchange rate. Any decrease in the interest rate attracts less capital from the international market and become a source of depreciation in the exchange rate.

Fiscal Policy

Fiscal policy also attempts to adjust the demand side of an economy. The government's spending and taxes are the tools of the fiscal policy. The government uses these tools according to the overall situation of the economy. Fiscal policy can be contractionary or expansionary depending upon the condition of the demand side of the economy and preferences of a specific government. The Congressional Budget Office (CBO) is the responsible body that determines the level of government’s expenses. The CBO gave approval for the use of 25 Billion USD to establish and support military bases.

International Trade

The American economy is the leading importing economy in the world and the third-largest exporting economy. Refined petroleum products were the largest American export in 2017 following by Cars, Planes and helicopters, natural gas, and packed medicine. While Cars are the biggest import of the US in 2017 following by Crude oil, broadcasting equipment, computers, and medicine ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"LpMyq1LY","properties":{"formattedCitation":"({\\i{}OEC - United States (USA) Exports, Imports, and Trade Partners})","plainCitation":"(OEC - United States (USA) Exports, Imports, and Trade Partners)","noteIndex":0},"citationItems":[{"id":1120,"uris":["http://zotero.org/users/local/s8f0QVnP/items/82DW4S36"],"uri":["http://zotero.org/users/local/s8f0QVnP/items/82DW4S36"],"itemData":{"id":1120,"type":"webpage","language":"en","title":"OEC - United States (USA) Exports, Imports, and Trade Partners","URL":"https://oec.world/en/profile/country/usa/","accessed":{"date-parts":[["2019",12,15]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (OEC - United States (USA) Exports, Imports, and Trade Partners). China is the largest trading partner of the US, following by Canada, Mexico, and Japan. The American economy is continuously facing trade deficits.

The American economy needs to open more for export and import as the theory of comparative advantage suggests that any economy can raise its consumer and production possibilities by making the economy more open. The US can increase its exports by producing the goods and services in which it has a comparative advantage, and it should import all goods and services from other countries in which it has a comparative disadvantage. The producer can gain from this approach by increasing its production, and the consumer can be benefited from this approach by consuming cheaper goods and services.

Conclusion

The empirical data on many of the key indicators of the American economy provides a stable outlook. Unemployment is on historically low levels, and inflation is also under control. Stable GDP growth rate promises for future expansions. The recent trade war with china slowed down the economy by a little bit, but the timely remedial steps from the FED played a vital role in regaining economic stability. Lower interest rates enable the economy to sustain its growth rate at the time of trade war with China. The forecasts of different national and international organizations project an annual GDP growth rate of around 2% for the next five years, which can be considered as a good sign for the residents of the US.

Works Cited

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Consumer Price Index Summary. https://www.bls.gov/news.release/cpi.nr0.htm. Accessed 15 Dec. 2019.

Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm. Accessed 15 Dec. 2019.

OEC - United States (USA) Exports, Imports, and Trade Partners. https://oec.world/en/profile/country/usa/. Accessed 15 Dec. 2019.

“United States - Gross Domestic Product (GDP) 2024.” Statista, https://www.statista.com/statistics/263591/gross-domestic-product-gdp-of-the-united-states/. Accessed 15 Dec. 2019.

"U.S. - GDP Growth by the Year 1990-2018." Statista, https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/. Accessed 15 Dec. 2019.

US Business Cycle. https://www.nber.org/cycles/cyclesmain.html. Accessed 15 Dec. 2019.

State Of The Economy Final Draft

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State of the Economy

Introduction

The economy of a state can be understood through certain factors or indicators known as economic indicators. The economic indicators help experts or professionals assess the precise condition of the economy. The investors make their decisions given the opportunities available in a specific market, based on the understanding developed from the economic indicators. The investors can predict changes in the economy of a country. Among the many indicators of economy, some more prominent factors are gross domestic product, employment, consumer price index, M2 (money supply), producer price index, current employment statistics, retail industries’ sales, business inventories and sales, S&P stock, consumer confidence survey, inflation, monetary policy, fiscal policy, etc. Economic indicators predict the future of a country’s economy. Economic indicators hold immense significance for consumers and especially the business persons. They can make decisions with confidence and clarity. Economic indicators are researched, identified, and calculated by certain specialized institutions such as the National Bureau of Economic Research, Bureau of Labor Statistics, United States Census Bureau, etc. The United States has an economy that can justifiably be claimed to be the world's one of the most diversified and wealthiest economies. The US economy is predominantly a free economy with a freedom score of 76.8. Though it has seen little declines in trade freedom, monetary freedom, labor freedom, and fiscal health, the overall freedom score of the economy has seen increased by 1.1 points. This progress can be attributed to improvements made in tax burden scores as well as those related to government integrity.

Business Cycle

The business cycle of the economy of a particular country or state refers to the rise and fall in the economy, mostly in terms of the gross domestic product, with time. The economists analyze business cycles and help investors and consumers make better financial decisions. A business cycle can be divided into four phases to better understand it. The phases include i) expansion, ii) peak, iii) contraction, iv) trough. These phases do not show an occurrence at regular intervals, that is, the four phases can have dissimilar periods depending upon the trends of industry, market conditions, and nature of businesses. Expansion is the start of a business cycle, characterized by the growth of the economy. Peak is the month wherein expansion begins to convert in contraction. Contraction refers to the decline in economic growth that ends at the trough, the month wherein contraction phase transitions to the expansion phase. Factors influencing business cycle include capital, supply & demand, and consumer confidence. The US economy is in the expansion phase since last ten years. It started with the trough that occurred at the end of 2008. The economists have been warning the investors that the recession stage is near. The peak month can start anytime indicating the start of the contraction period.

Gross Domestic Product (GDP)

Gross domestic product refers to the value of goods produced and services made in terms of money in a country given a specific period. GDP is the most widely used tool by the economists to measure the size and growth rate of the economy. It is believed by the experts that a rising GDP indicates the growth of the economy whereas a declining GDP indicates that the economy is in trouble. GDP when adjusted for inflation provides deep insight into the economy. GDP can be measured as ‘nominal GDP’ (by measuring the raw data), ‘real GDP’ (by adjusting for inflation and comparing economic outputs between years and over time), 'GDP growth rate' (by measuring increases in GDP over specific periods), and 'GDP per capita' (by measuring GDP per individual in a country). Three approaches – expenditure, output, and income – are used to calculate GDP. Current GDP in the US is about 21345 billion and it is expected to be 22750 billion in 2020. GDP in the US was 2.35% in 2019 as compared to the previous year. It is expected to be 2.09% in 2020 as compared to the current year.

Inflation

It is the measure of the rate at which average prices of goods and services increase for a specific period. It influences the economy of a country by a decreased power of purchasing of its currency. Prices of goods and services rise due to the increased production costs. Inflation can be controlled through a decrease in government expenditure or a reduction in private spending. Consumer price index (CPI) is the measure of average change in prices of certain goods and services over time. It is used to measure inflation. CPI is measured monthly for all goods and services in the country. It increased recently by 0.3% in November for all consumers living in cities. Over the year, this increase counts 2.1 percent. A press release published in CNBC informed that US consumer prices have increased in November more than the expected level. The percentage of CPI rise given by US Bureau of Labor Statistics is 0.3 percent (CPI Home). It articulated that the borrowing costs have been reduced three times this year and, therefore, the data obtained suggest that interest rates should not be cut in the near term. The reason for the rise in CPI by 0.3 percent was that the consumers paid more for gasoline for the household use (“US Consumer Prices Increase More than Expected in November”).

Unemployment

Unemployment is considered to occur when people actively search for employment but cannot find work. Economists calculate the unemployment rate by dividing the number of unemployed persons by the number of employed persons. Unemployment is not an accurate measure of joblessness because it does not take into consideration every person without a job; it only considers unemployed individuals actively involved in job search. The unemployment rate of the country remained little changed in November, standing at 3.5 percent (Employment Situation Summary). The number of long-term unemployed persons, 1.2 million, remain unchanged in November. The little decrease of 0.1 percent in unemployment rate can be attributed to the nonfarm payroll employment rise as 266000 individuals got jobs.

Monetary Policy

It is a macroeconomic policy given by the central bank, comprising actions and communications of the central bank to manage money supply. It contributes to economic growth by increasing liquidity. To prevent inflation to occur, the monetary policy reduces liquidity. Monetary policy is conducted by the central bank to attain stability in prices and manage fluctuations in the economy. Central banks adjust the supply of money, usually by the open market operations (“Monetary Policy and Central Banking”). The Federal Reserve is responsible for conducting the monetary policy. It manages the short-term interest rates and has an impact on the cost and availability of credit. The Federal Reserve System decided to lower the interest rates to 1.55 percent that are effective since October 31, 2019 (Monetary20191030a1.Pdf). The Federal Reserve reduces interests’ rates to stimulate the economy. Consequently, it becomes cheaper to borrow money. It becomes subsequently easier for the consumers to spend more. When consumers borrow money on less interests, their buying power increases, ultimately causing increased spending throughout the economy. Like consumers, entrepreneurs can purchase large equipment as their profit margins increase.

Fiscal Policy

It is a policy that is used by a government to adjust the levels of its spending and rates of taxes for monitoring and influencing an economy. Together with the monetary policy, the central bank uses both policies to regulate and influence the money supply of a country. Expansionary fiscal policy happens when Congress cuts the rates of tax or increases spending of government. Contractionary fiscal policy occurs when Congress raises the rates tax or cuts the spending of government. Expansionary fiscal policy increases the level of aggregate demand, and Contractionary fiscal policy decreases it. The current US fiscal policy is Contractionary as the government levies taxes and lowers spending. An interesting report published on Congressional budget office website presents CBO's projections describing federal budget deficits to be huge for long periods in history (An Update to the Budget and Economic Outlook: 2019 to 2029 | Congressional Budget Office). It forecasts that federal debt would grow 95% of GDP in the next ten years. Economic growth will be slower to be 2.3 % in 2019.

International Trade

It refers to exchanging goods and services beyond the country's borders with two types of international trade relative to a particular country, export and import. The top exports of the United States are Cars ($56B), Planes, Helicopters, and/or Spacecraft ($54B), Refined Petroleum ($74.5B), Packaged Medicaments ($29.5B), and Gas Turbines ($31.6B). The top imports are Computers ($73.5B), Cars ($178B), Vehicle Parts ($67.1B), Crude Petroleum ($129B), and Broadcasting Equipment ($105B) (OEC - United States (USA) Exports, Imports, and Trade Partners). Further, the export destinations of the US on top include Japan ($66.9B), Germany ($61.6B), Canada ($149B), Mexico ($181B), and China ($133B). The import origins on top are Germany ($111B), Japan ($125B), Canada ($274B), Mexico ($307B), and China ($476B). The US should not engage in free trade with its trading partners. Protecting its domestic industries is essential for the economic growth. The US citizens would also find this reasonable as it aligns with their interests. People will feel secure about their businesses and find new ways to expand for growth and development.

Conclusion

The US business cycle in its first stage now that is in place since 2008's end of the year. Expansion is the growth of business. However, it is very likely to come to an end. GDP of the country is increasing which is a good sign for the economy. The experts are worried about solving the issues of inflation and unemployment. Monetary policy tends to decrease interest rates, whereas fiscal policy is contractionary. The country predominantly involves in international trade.

Works Cited

“Monetary Policy and Central Banking.” IMF, https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/16/20/Monetary-Policy-and-Central-Banking. Accessed 24 Dec. 2019.

“US Consumer Prices Increase More than Expected in November.” CNBC, 11 Dec. 2019, https://www.cnbc.com/2019/12/11/us-consumer-price-index-rose-0point3percent-in-november-vs-0point2percent-increase-expected.html.

An Update to the Budget and Economic Outlook: 2019 to 2029 | Congressional Budget Office. https://www.cbo.gov/publication/55551. Accessed 23 Dec. 2019.

CPI Home : U.S. Bureau of Labor Statistics. https://www.bls.gov/cpi/. Accessed 24 Dec. 2019.

Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm. Accessed 24 Dec. 2019.

Monetary20191030a1.Pdf. https://www.federalreserve.gov/monetarypolicy/files/monetary20191030a1.pdf. Accessed 24 Dec. 2019.

OEC - United States (USA) Exports, Imports, and Trade Partners. https://oec.world/en/profile/country/usa/. Accessed 23 Dec. 2019.

Steve Job Subject ( Leadership)

Steve Jobs Subject (Leadership)

[Name of the Writer]

[Name of the institution]

[Date]

Steve Jobs Subject (Leadership)

FIRST ASSIGNMENT

There is no doubt that Steve Jobs revolutionized the computer industry with his extraordinary mind. He had many amazing qualities that made him stand out from all the contemporary corporate leaders. He dreamed of a tomorrow which was impossible to even imagine in 1970’s. People never thought that computers will become this much easy to use and carry. There are certain leadership traits found in him more than anyone else. Steve knew exactly how to make dreams true and interest a profession (Issacson, 2012). He was a man of vision and due to his broad vision, apple is leading the telecommunications industry today e.g. The Macintosh and IPhone etc. As a leader he was well aware of the fact when to bring creativity in the work and products. He always brought the innovation and creativity at the right time. He was a student of Calligraphy and studied this discipline from his own interest in college. But the moment he entered the corporate world, he carried the calligraphy with him and fitted them as beautiful fonts in his computer. Mastering the message needed to be conveyed to the audience was his kind of thing which separated him from other corporate leaders (Yoffie & Cusumano, 2015). Instead of saying yes, he made sure to say no to all the unnecessary things and clear the disturbance. Steve Jobs was socially intelligent enough to convince his customers to buy his products. He was not only a businessman but was someone who cared about the dreams of his customers and helped them accomplish their dreams. He spoke to his customers on an emotional level and made a strong bond with them through products. Due to his social intelligence attribute, he was able to achieve success and placed Apple at the top. He truly understood his customers’ needs and knew what they wanted that’s why made products according their desires.

SECOND ASSIGNMENT

Ethical Leadership

Ethical leadership is the leadership that also involves ethical values and beliefs in leading the way for others. It means setting example for the followers by keeping moral concerns for others and giving them the rights and respect they deserve. Under this kind of leadership, the leader protects the dignity of others through trust, fairness, honesty, charisma, kindness and moral support. Some corporate leaders find it quite challenging to be a successful businessman as well as an ethical leader simultaneously as it often contradicts their self-interests.

Characteristics of Ethical Leadership

There are few characteristics of ethical leadership that should be followed by any ethical leader. They include justice, respect for followers which also involves the employees and subordinates in corporate world. It encompasses of honesty no matter how undesirable the situation is as some business leaders design strategies to trap customers in order to earn more revenues. Steve Jobs was no doubt an inspiration for other business leaders and set many innovative examples but when it comes to being ethical, he lacked certain traits. There were some circumstances in which he proved to be ethical but, he reflected unethical behavior too. It depends on what kind of ethics is under consideration. He was very ethical when it comes to the integrity of his company, evolving the company and protecting the company’s reputation at any cost. He was very selfless related to Apple and never did anything for personal interests. But on the other hand, he violated certain ethical codes by providing unhealthy working conditions and environment for his employees. He never showed concern for the health of his employees. Famous example is the incident of apple factories in China where workers committed suicide and some were injured too due to miserable work atmosphere (Worstall, 2018). He had a rude and harsh attitude towards his subordinates and never participated actively in charity. He also used to park in the spot reserved solely for physically disabled people (Balch and Armstrong, 2010). This is why ethical leadership is very important for many reasons. It not only focuses on maximizing profits and achieving success but also give importance to the right thing to be done for the humanity.

THIRD ASSIGNMENT

Steve Jobs as a Prominent Leader

The prominent leader taken here is Steve Jobs, co-founder of the multinational telecommunication corporation Apple Inc. He made Apple the world’s biggest information technology corporation by revenue in the world. Apple drastically changed the world through greatest innovations and creativity the people have ever experienced by its high-quality products. Steve Jobs was a college dropout but had great passion for computers which made him involved in the business of computing (Young & Simon,2006). He expanded the company by introducing a variety of different products and ultimately proved himself by earning a huge name in telecommunications. He was diagnosed with cancer and died in October 2011 after leaving his post of CEO at Apple tin August the same year.

Leadership Style

Steve Jobs had a blend of different leadership styles. He was a transformational leader in a way that he transformed the computing world with his extraordinary mind. He inspired and motivated others to follow their dreams. The main ingredient in transformational leadership is the vision which makes the leaders different than others. Steve jobs had a very strong vision and was very consistent in his struggle to make his vision a reality. Steinwart (2014) considers him a transformational leader due to his three main attributes which are, creativity, vision and pensionary. But, there are some more traits of transformational leadership which is absent in his personality. They are more related to interpersonal skills. Those traits are, empowerment and interaction. He was not inspiring and motivational for his employees due to his extra strict attitude. He was not understanding rather controlling. He was harsh which made it hard for people to interact with him. He was more of a transactional leader who wanted his company to be successful and high performance of his employees at any costs. He was unbeatable in product design and marketing. Transformational leadership is about meeting followers on emotional level and showing concern, Jobs didn’t have both of these traits. Transformational leader has charisma in the personality whereas Steve was known for his anger and gave tough time to his employees.

Leadership Characteristics of Steve Jobs

Steve Jobs was the owner of diverse leadership characteristics which were often contradicting in nature. Steve Jobs was abrasive when it came to supervising his employees. He was surprisingly innovative in designing the products for his company and launching marketing campaigns for the promotion of the products. Although he was very careful in decision making but he also took many risks for the benefit of the corporation (Young & Simon,2006). He was adaptable with the changing environment that is why changed the design of his products according to the changing needs of his customers. He learned from his failures and made sure not to repeat them again in future. His vision was the trait which made him so successful in the world. Without his vision, apple might never be formed. Another trait of Steve Jobs involves his perfectionist attitude. He was always concerned for perfection in his products that is why he used to increase the working hours for his employees to demand better quality. A leader should have a passion and Steve Jobs had both in abundance i.e. Passion for his vision and self-confidence to shape his dream into a reality. He also challenged the limits of your employees by giving them tough tasks to handle and increasing their capacity. He was very focused towards his goals and did everything to achieve them. He had a great way of conveying his message to the world and that is why he used to apply storytelling technique in his presentations. He was authoritative and dominant in the leadership and wanted his employees to achieve the benchmarks he made for them. But he was also trustworthy and honest and this is why his employees used to put all their trust on his decisions. He preferred excellence on money and never compromised the quality of products for more revenue.

Servant leadership aspect of Steve Jobs

Steve Jobs cannot be said to be servant leader as servant leader is a leader whose goal is to serve people and not just focus on the company’s progress. The truth is, Steve Jobs was very passionate about Apple and did a lot of struggle to bring the company on top. He was a servant leader for his company as he was very hard working and wanted to see Apple become the number one in the world. When Apple was close to bankruptcy in 1997, he came to Apple because of his loyalty to the company and turnaround the organization. This incident is a greatest proof of his dedication and devotion for his company. He was very attached to Apple that’s why he didn’t resign and hide his terrible health state because of cancer until 2011. Even in deteriorating health situation, he used to work hard and never compromised on his performance. He never took leaves from the company and was always available for help whenever his subordinates needed him. But he was not a people’s leader and cannot be named as a servant leader as he was very bitter on emotional levels and doesn’t served welfare much. He didn’t perform any charity nor showed any concerns for the humanity. He was contradicting in his approach towards technology as he made the technology accessible for a common man but made it unreachable for his children because he wanted them to focus on other things. Steve never provided any comfort for his employees but he made sure to make his customer’s dreams come true with the help of his high-tech products.

References

Isaacson, W. (2012). The real leadership lessons of Steve Jobs. Harvard business review, 90(4), 92-102.

Steinwart, M. C., & Ziegler, J. A. (2014). Remembering Apple CEO Steve Jobs as a" Transformational Leader": Implications for Pedagogy. Journal of Leadership Education, 13(2).

Worstall, T. (2018). Has Apple Become More Ethical Since Steve Jobs' Death A Year Ago?. Forbes. Retrieved 27 October 2018, from https://www.forbes.com/sites/timworstall/2012/10/05/has-apple-become-more-ethical-since-steve-jobs-death-a-year-ago/#5bd9888c1d72

Yoffie, D. B., & Cusumano, M. A. (2015). Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs. HarperBusiness.

Young, J. S., & Simon, W. L. (2006). iCon Steve Jobs. John Wiley & Sons.

Summary Of The Sky Wars

[Name of the Writer]

[Name of Instructor]

[Subject]

[Date]

Summary of the sky wars

EchoStar Communication Corporation proclaimed its intention to seek the assets of Hughes Electronics Corporation on 28th October 2001. DirecTV and EchoStar are the two Direct Broadcast Satellite (DBS) companies which provide MVPD services to the consumers in the US. From 1997 to 2001, the two companies were dominant in the DBS market. The DirectTV had 10.9 subscribers while the EchoStar had 7.5 with the capacity of 500 channels and 400 channels respectively. They collectively were competing with Cable Company to increase efficiency but there were constraints of higher charges. Their merger would have an eliminating implication DBS services if they were allowed to proceed. Under MVPD they were providing the services of Cable, DBS, MMDS C-band, and SMAT. The percentage of national MVPD subscriber were: Cable 78%, DBS 18.3, MMDS 0.8, C-band 1.1, and SMATV 1.7 in June 2001.

Cable companies were providing local services while the DBS was providing national and their national pricing was depending on service offer and cable prices at the local level. Moreover, they had the ability to adjust prices at the local level. The merger would have sufficient market power for raising their prices if they had a narrow market. Now there came the question of raising their prices after the merger. If their prices are nationwide than the cable had the ability to provide competition by causing lower DBS prices. The proponents were of the view that DBS provider is to compete for more for attracting the Cable customers than each other’s customers.

As a result, their installation and equipment prices dropped to zero and EchoStar accepted that DirecTV is its competitor ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"k0gENGxv","properties":{"formattedCitation":"(Gilbert and Ratliff)","plainCitation":"(Gilbert and Ratliff)","noteIndex":0},"citationItems":[{"id":337,"uris":["http://zotero.org/users/local/orkqtrjP/items/J85VT324"],"uri":["http://zotero.org/users/local/orkqtrjP/items/J85VT324"],"itemData":{"id":337,"type":"article-journal","title":"Sky Wars: The Attempted Merger of EchoStar and DirecTV (2000)","source":"escholarship.org","abstract":"Author(s): Gilbert, Richard; Ratliff, James","URL":"https://escholarship.org/uc/item/38p01826","shortTitle":"Sky Wars","language":"en","author":[{"family":"Gilbert","given":"Richard"},{"family":"Ratliff","given":"James"}],"issued":{"date-parts":[["2007",9,1]]},"accessed":{"date-parts":[["2019",4,7]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Gilbert and Ratliff). The matter went to court where they found difficulties in providing evidence. The coordinated effect of the merger was that it created an environment which was beneficial to cable firms to collude. While the unilateral effect was that they had enough market power to manipulate the prices.

Bibliography

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Gilbert, Richard, and James Ratliff. Sky Wars: The Attempted Merger of EchoStar and DirecTV (2000). Sept. 2007. escholarship.org, https://escholarship.org/uc/item/38p01826.

Supply And Demand



Supply and Demand

[Name of the Writer]

[Name of the Institution]

Supply and Demand

How do you think the free rider problem throws off the determinants of supply and demand?

Ans. Individual utilizing public goods without paying their market share are known as free riders. The concept of free rider problems is defined as the market failure that occurs when individuals don't pay for public goods and enjoy its benefits. These products cannot exclude other people because there is no rivalry and it causes underproduction of goods. People are asked to contribute to the construction of public goods like bridge or parks, but free riders enjoy the benefits of these products. Government provide public goods, and the problems of free riding are the reasons that the private firms do not offer them because they cannot exclude anyone from its benefits.

The features of private goods are that private companies have a proper mechanism to exclude free riders from its benefits. First, they don't provide public goods, and if they do, they will make lists of the people who want to pay for the cost so that those specific people get all the benefits (Pearce, 2014). When the government is providing public goods, the exclusion is ambiguous because they cannot exclude free riders in public to enjoy its benefits. Suppose if the government wants to charge people for the provision of clean air and the ambient environment. This mechanism would fail because they cannot exclude people from enjoying its benefits known as free rider problem. The characteristics of the public are that there is no rivalry and no excludability. Non- rivalry means that the available amount of public goods for other people does not decrease when its consumed by the public. Non- excludability implies that there is no possible condition to exclude other people from enjoying the benefits of public goods. This is how free rider problem throws off determinants of supply and demand because of the characteristics of public goods. These goods in free markets are often underprovided because of non- rivalry and non-excludability.

Consider the Nintendo Wii and read the attached article (Wii.pdf in the bottom left). Was the severe shortage for over two years a marketing ploy called intentional scarcity in which a company purposely keeps its hot product in short supply to build buzz, or was it merely bad planning on Nintendo's part? What did this mean for individuals and households trying to maximize utility? What were the implications for Nintendo as a firm seeking to maximize profit?

Ans. Firms in a competitive market strive to maintain their leading position when the new firms enter into the market or same firms with an innovative idea. By making new technology in the market, the firms gain a superior advantage over other firms. Samsung chooses to sell its product at high prices because they had high tech advantage over other firms which were having less powerful technology and low rates. They did not consider to enhance the technology by investing in their Research and development before the seventh generation. There are several competitive advantages which were adopted by Nintendo which cause it success and failure in the market.

According to the study on customers perception which analyzed that how Nintendo lost its leading position in the gaming industry was due to strategies adopted for marketing their product (Le, 2018). The two main competitors in of Nintendo is Microsoft and sony. The study analyzed past marketing strategies of other companies in competition with Nintendo. Customers views of marketing strategies adopted by Nintendo were less influential and accurate as compared to Sony PlayStation. Nintendo took the Blue ocean marketing strategy which means introducing a product having very less competition or no competition and doing business with no pricing pressure. Nintendo was competing in red ocean market where they were competing with Microsoft and Sony. Instead of gaining the advantage in the red ocean market they adopted the blue ocean marketing strategy. When the firm operate with these startegies, it causes shortage because other firms won by their marketing strategy and demand for Wii consoles dropped.

Consumers and household maximize their utility by the usefulness of the product. In economics, the utility maximization is the term used for maximum satisfaction obtain from a product with least amount of money spent on that product. Nintendo first price dropped in the year 2009 in united states from 249 dollars to 199 dollars. In Europe, the prices fell from 249 pounds to 199 pounds. It set a regional record for a month in the year 2009, but the sales dropped due to the price cut. The cut in prices are the implications for profit maximization for Wii consoles.

References

Le, H. (2018). Nintendo vs. Its Competitors in Marketing Efforts: From the Point of View of Customers.

Pearce, D. W. (2014). Blueprint 4: capturing global environmental value. Routledge.

Supply And Demand

Demand and Supply

Name

[Institutional Affiliation(s)]

Author Note

Summary of Scenario 1

I opened an ice-cream stand on campus named as Ice-Campusades, and I sold each ice-cream at the rate of $1.50. I purchased the same variety of ice-cream on a daily bases. I also ordered the same quantity for each day of moth. At the end of the first month, I found that there were some days in the month when I left with unsold ice-creams in my stock. While in some days of the month, I did not have enough stock of ice-cream to fulfill the need of all customers. This was happening even I was selling the same ice-cream on the same rates.

Shifts in Demand for Ice-Cream

In the given situation, the demand for ice-cream was changing over time. The demand of ice-cream should change according to the changes in its price. Law of demand explains price as one of the determinants of demand. Price is the key factor of change in demand. In our case, the price was not changing at all, but the demand for ice-cream was changing over time. This was happening due to the shifting factors of demand. Due to the impact of a shifting factor, demand for a commodity can change on existing levels of price. In the case of Ice-Campusades, there were three factors that were shifting the demand for ice-cream.

The weather could be the first factor that was shifting the demand for ice-cream. There was the possibility that students like to spend their pocket money on ice-cream on a sunny day. But on a rainy or cloudy day, they would like to take tea or coffee.

Taste can be the next shifting factor for the demand for ice-cream. Students did not like to spend their money on ice-cream on a daily bases. There could be other options that can give more satisfaction to a student as compared to the utility of ice-cream. According to the law of marginal utility, the continuous and permanent use of ice-cream could decrease its marginal utility while the utility of other things could be higher due to less consumption. Students could maximize their utility by consuming different edibles.

The trend could be the final factor of shifting in demand for ice-cream. Mostly students purchased ice-cream when their other friends purchase the ice-cream. The preferences of one student could change the preferences of his fellows.

Summary of Scenario 2

Another ice-cream stall was opened on the campus with the permission of school administration. While the student's strength almost remained the same.

Supply Side Effects

The opening of another stall on the campus could affect the price of ice-cream. But first of all, we here assume that the demand for ice-cream remained constant over the period of analysis. The opening of another ice-cream stall would increase the supply of ice-cream within the campus. If I remained my ice-cream stock at the same level, and my competitor also has an equal ice-cream stock on daily bases, the total supply of ice-cream would be doubled. While demand was unchanged. Increase in the supply of ice-cream must decrease its price. This decrease in price would increase the existing levels of demand for ice-cream, and the equilibrium would be restored in this small market for ice-creams.

Conclusion

There can be different factors that can change the existing levels of demand and supply. Price is the most important factor that can change demand and supply. Any other factor that can change demand or supply called the shifting factors of demand or supply. In the provided case study, the first scenario was about the shifting factors of demand. While the second scenario was about the impact of change in supply over the price of a commodity.

Supply And Demand Outline

Supply and Demand Outline

Your Name (First M. Last)

School or Institution Name (University at Place or Town, State)

Apple iPhone 6 plus

The iPhone 6 plus is one of the famous product of Apple company. It got popular due to its battery life, advertisement, high functionality, and easy to use. Sale of iPhone 6, 6s, and 6s plus in America is about seventy-four million, seventy-seven million, and twenty million respectively. Approximately 170 million iPhone 6, 6s, and 6s plus is sold. In the first three days ten million iPhone 6 and 6 plus is sold. In U.S cost of iPhone 6 plus vary according to its version. Cost of 16GB, 64GB, 128GB, would be 299, 399, and 499 dollars respectively. Off-contract cost of iPhone 6 plus started from 749 dollars for 16GB to 849 dollars for 64GB, and 949 dollars for 128GB version ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"PCa8xTSK","properties":{"formattedCitation":"(\\uc0\\u8220{}Apple Announces iPhone 6 & iPhone 6 Plus\\uc0\\u8212{}The Biggest Advancements in iPhone History,\\uc0\\u8221{} n.d.)","plainCitation":"(“Apple Announces iPhone 6 & iPhone 6 Plus—The Biggest Advancements in iPhone History,” n.d.)","noteIndex":0},"citationItems":[{"id":51,"uris":["http://zotero.org/users/local/rVaVAHaF/items/6XCZW46V"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/6XCZW46V"],"itemData":{"id":51,"type":"webpage","title":"Apple Announces iPhone 6 & iPhone 6 Plus—The Biggest Advancements in iPhone History","container-title":"Apple Newsroom","URL":"https://www.apple.com/newsroom/2014/09/09Apple-Announces-iPhone-6-iPhone-6-Plus-The-Biggest-Advancements-in-iPhone-History/","language":"en-US","accessed":{"date-parts":[["2019",1,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Apple Announces iPhone 6 & iPhone 6 Plus—The Biggest Advancements in iPhone History,” n.d.).

The stock of iPhone was going down whereas androids were rising in the stock market. After the launch of iPhone 6 plus, Apple stocks start rising. Demand for iPhone 6 plus exceeded than expectation. Apple increased its supply chain to raise its production. Shipment of Three to four million units falls to manage the new production lines. Due to the increase in demand iPhone 6 plus remain out of stock in starting consistently. Supply readjustment took time which means there would be the time lag between retail availability and supply management.

Two main factors that are the increase in price substitute and fall in the price of complement can lead to the shift in demand curve from left to right. If the demand increases for the competitor's products due to advanced features, excellent advertisement strategy can shift the demand curve of iPhone 6 plus to the left.

The demand for iPhone 6 plus was recorded more than expected due to which supply curve shifts to the right from left. The main factors that moved the supply curve from right to left include the popularity of product with high profile advertisement and advanced features of the product. To meet the demand, supply needs to increase, and factors like the technique of production and the increase in resource price lead the supply curve shift from left to right.

The above graph shows the factors which affect the demand curve. It includes taste and preferences, expectations, the income of the consumers, total buyers, and expectations. Supply of iPhone 6 plus also depend on different factors some are resource price, the price of other goods and expectations, supply shocks, taxes, subsidies, and technique of production ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"d8G48CgZ","properties":{"formattedCitation":"(Mayo, 2014)","plainCitation":"(Mayo, 2014)","noteIndex":0},"citationItems":[{"id":53,"uris":["http://zotero.org/users/local/rVaVAHaF/items/NZ4K2DAG"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/NZ4K2DAG"],"itemData":{"id":53,"type":"post-weblog","title":"With stronger than expected demand for iPhone 6 Plus, Apple reportedly shifting some production away from iPhone 6","container-title":"9to5Mac","abstract":"Following some statistical analysis from yesterday that indicated the iPhone 6 usage ratio was beginning to favor iPhone 6 Plus, Digitimes now reports that Apple is following through …","URL":"https://9to5mac.com/2014/10/07/with-stronger-than-expected-demand-for-iphone-6-plus-apple-reportedly-shifting-some-production-away-from-iphone-6/","language":"en-US","author":[{"family":"Mayo","given":"Benjamin"}],"issued":{"date-parts":[["2014",10,7]]},"accessed":{"date-parts":[["2019",1,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Mayo, 2014).

Price floor or price ceiling in the iPhone 6 plus would benefit consumers because Apple Company is in control of iPhone 6 plus pricing. It is like government regulation of the price floor. Where Apple make sure that the price doesn't rise from a certain level even when the demand is too high than the supply chain. This means the only option for the company is to change the supply chain rather than increasing the price of the phone to decrease the demand. The ten million iPhone 6 plus sell out in just three days of launch results in profit for not only producers and distributors but also for the consumers ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"9crmGT8s","properties":{"formattedCitation":"(Straub, 2015)","plainCitation":"(Straub, 2015)","noteIndex":0},"citationItems":[{"id":57,"uris":["http://zotero.org/users/local/rVaVAHaF/items/R7UKSS43"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/R7UKSS43"],"itemData":{"id":57,"type":"post-weblog","title":"Pewaukee Economics : The iPhone 6s Is Going To Be Big!","container-title":"Pewaukee Economics","URL":"http://pewaukeeeconomics.blogspot.com/2015/09/the-iphone-6s-is-going-to-be-big.html","shortTitle":"Pewaukee Economics","author":[{"family":"Straub","given":"Mrs"}],"issued":{"date-parts":[["2015",9,22]]},"accessed":{"date-parts":[["2019",1,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Straub, 2015).

iPhone 6 plus leads the Apple stock high in starting but later on it results in market failure due to many issues. Issues of touch screen and bending screen results in decreasing the demand of the phone. Also, issue rises due to the warranty that is whether the consumer can get repaired set or not. Another issue that came into notice was the camera of the iPhone 6 plus. Many complain received about the blur images even when the consumer keeps the iPhone still. iPhone 6 plus is not the complete market failure, but issues decrease the overall demand of it ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"hUye80qF","properties":{"formattedCitation":"(\\uc0\\u8220{}Apple\\uc0\\u8217{}s iPhone 6, 6 Plus are failing early thanks to \\uc0\\u8216{}touch disease,\\uc0\\u8217{} bending problems - ExtremeTech,\\uc0\\u8221{} n.d.)","plainCitation":"(“Apple’s iPhone 6, 6 Plus are failing early thanks to ‘touch disease,’ bending problems - ExtremeTech,” n.d.)","noteIndex":0},"citationItems":[{"id":59,"uris":["http://zotero.org/users/local/rVaVAHaF/items/EIPKPCGL"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/EIPKPCGL"],"itemData":{"id":59,"type":"webpage","title":"Apple's iPhone 6, 6 Plus are failing early thanks to 'touch disease,' bending problems - ExtremeTech","URL":"https://www.extremetech.com/mobile/234552-apples-iphone-6-6-plus-are-failing-early-thanks-to-touch-disease-bending-problems","accessed":{"date-parts":[["2019",1,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Apple’s iPhone 6, 6 Plus are failing early thanks to ‘touch disease,’ bending problems - ExtremeTech,” n.d.)

.

References

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Apple Announces iPhone 6 & iPhone 6 Plus—The Biggest Advancements in iPhone History. (n.d.). Retrieved January 12, 2019, from https://www.apple.com/newsroom/2014/09/09Apple-Announces-iPhone-6-iPhone-6-Plus-The-Biggest-Advancements-in-iPhone-History/

Apple's iPhone 6, 6 Plus is failing early thanks to "touch disease," bending problems - ExtremeTech. (n.d.). Retrieved January 12, 2019, from https://www.extremetech.com/mobile/234552-apples-iphone-6-6-plus-are-failing-early-thanks-to-touch-disease-bending-problems

Mayo, B. (2014, October 7). With stronger than expected demand for iPhone 6 Plus, Apple reportedly shifting some production away from iPhone 6. Retrieved January 12, 2019, from https://9to5mac.com/2014/10/07/with-stronger-than-expected-demand-for-iphone-6-plus-apple-reportedly-shifting-some-production-away-from-iphone-6/

Straub, M. (2015, September 22). Pewaukee Economics : The iPhone 6s Is Going To Be Big! Retrieved January 12, 2019, from http://pewaukeeeconomics.blogspot.com/2015/09/the-iphone-6s-is-going-to-be-big.html