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Economic Inequality Macro and Microeconomics - Essay Example

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There are established economic goals that are widely accepted in most countries. These include economic growth, full employment, economic efficiency, economic stability, economic freedom, economic security and economic equality (McConnell and Brue, 8-9). Some of these goals are complementary, meaning when one goal is achieved, other goals may also be realized…
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Economic Inequality Macro and Microeconomics Essay
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Economic Inequality Macro and Microeconomics

Download file to see previous pages... Although the focus of one country may vary from another, economists and government policymakers continue to work on policies to achieve these goals. The goal to eliminate economic inequality is one of the many established objectives focused not only within a single economy but also the whole world. Economic inequality is seen in both microeconomics and macroeconomics level. In a microeconomics perspective, it is evident through the occurrence of unemployment. Unemployment is perceived as a basic cause of inequitable distribution of income in an economy resulting to some group of citizens facing poverty while others enjoying abundance. On the other hand, inequality in a macroeconomics perspective is observed as nations differ in their endowment of economic resources. Some nations are endowed with abundant economic resources while others are left to suffer with their very minimal amount of resources. From both perspectives, we end up having two groups when we talk about our people or nations of the world. Economic inequality results to poverty creating the divide between the rich and the poor. Poverty hinders economic growth and development. It is the root of cause of problems such health problems, economic distress, unemployment and more importantly hunger. That is mainly the reason for economists and government policymakers all over the world to establish ways on alleviating if not completely eliminating poverty. With economic growth and development, there will be rising outputs and income; people are more able to meet their needs and wants. This also results to improved quality of life as greater opportunities are provided without sacrificing other opportunities and pleasures. A nation experiencing growth and development can resolve socioeconomic problems better and undertake new programs to alleviate poverty more readily without impairing existing levels of consumption, investment and public goods production (McConnell and Brue, 132). The level of economic growth and development of a country also reflects its position in the world economy. Countries are categorized as either developed or developing - the first being wealthy and the latter being poor. Wealthy group was composed of most of the Western European countries, Canada and the United States. Inhabitants of these regions lived (and still lived) in great affluence and consumed a large part of the world’s resources. The other group - Latin America, Asia and Africa- was poor, underdeveloped and contained almost 75 percent of the world’s population (Appleyard and Field Jr, 381). World Bank characterized countries according to their incomes. In its annual World Development Indicators in 2000 and World Development Reports in 1999/2000, countries are grouped as low- income economies, lower-middle-income economies, upper-middle-income economies and high-income economies (World Bank, 251). Economists and government policymakers, especially those in developing countries began to look for reasons to explain this disparity and for ways to eliminate it. Poverty creates the disparity that is experienced by the people from the developed and developing countries. There is a need to realize and address the issue of poverty especially in the continent of Africa. William Easterly worked on a paper entitled “Can the West Save Africa” ...Download file to see next pagesRead More
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