Economic Issues in USA and China - Research Paper Example

Economic issues in USA and China Microeconomic issues in the simplest and most basic sense refers to the study and observation of the single or individual business decisions and practices. It could also refer to the aspect and circumstance where the forces of the market such as supply and demand meet and interact so as to form an equilibrium conditions. Macroeconomics on the other hand refers to the circumstance and situation whereby the aggregate aspects of the economy or country are analyzed with the aim of making the economy better. A practical case and example of a macroeconomic issues is the question of employment levels in a country, the Gross Domestic Product, inflation rates amongst other aggregate or bigger aspects. Microeconomics on the other hand would focus mostly on how for instance a company would boost and reorganize its production capacity so as to reduce output and at the same time maximize output. As a matter of fact and retrospect, this paper will focus in details in relative terms the Microeconomics and Macroeconomic issues relating to the United States of America and China. To begin with the United States of America by fact and reason happens to be one of the richest countries in the world today if the number of industries and billionaires is anything to go by. This is the reason as to why the current Gross Domestic Product which is informed by per capita income stands at the $16.8 trillion. China on the hand has a Gross Domestic product of $9.24 trillion, which is relatively lower than that of the United States of America (White, Jude and Xiaoyuan, 12). One of the reasons that has been given as the possible justification and reasons for the growth of the US economy comparative to the Chinese includes the economic policies. From the outright and face value, the United States of America happens to be a free society and thus a free economy by extension. This is to say that the amount of fiscal and monetary interventions that the United States government invokes are on the minimum. Thus, the free markets forces would interact and meet at their optimum or equilibrium. China on the hand, employs a stringent mode of rules and policies which includes the inclusion of monetary and fiscal policies in any event that they are needed or necessary. It goes without mentioning that once the interventional rules and policies are involved then some side effects would be incurred. For instance, if the policies are enforced by a government, then the tax rate would increase which implies that the level of investment would reduce. This stems from the fact that Investment which comes in the form of companies and other ventures that earns revue and funds for the government and people is a direct and proportional function of the rate of interest. Thus, it is safe to assert and infer that the level and amount of taxation relative to the investments approach are relatively higher in China than the United States of America. Thus, the number of industries and companies in China would therefore be lesser and this explains why the Gross Domestic Product of the United States of America is relatively higher in this respect and circumstance. Subsequently, technology has been named by economic analysts and social commentators as one of the most critical pillars of economies around the world. This comes in the forms of the embrace to technological advancements and the ability of a country to initiate technological growth and development. It is common knowledge that the United States of America as a country has in the recent past spearheaded some of the most robust and game-changing moves in the field of technology. This is not to mention that the China has not! Rather it is embrace of technology that actually matters in this line of thought and respect. A practical case and example would be the case and circumstance of the social media as an avenue for market and therefore a crucial component economically. China has put in place rules and regulations that regulate and censure to some extent the usage of the social media. Thus, little in terms of economic marketing could be done through the social media such as Facebook. It is important and imperative to note and mention that the social media is one of the most viable tools for linking economic markets around the globe due to the size of the population of users in the social media. This seems to imply that the lack of censuring that the United States of America has employed as an approach is critical because it ensures that the people and the markets by extension have a free and easy way to interact. Population is a key component both at that macroeconomic level and the microeconomic level. This is to say and mention that population as a concept is subdivided into its various compositions. For instance what is the composition of each gender, age, what are the preferences of each classification, are the resources available are sufficient to serve and meet the demands of the population? Firstly, population bring to the fore the notion of available labour and market-at the microeconomic level. This is to say that a huge population is important because it ensures that the market is ready and available to purchase the produce from the companies and firms. Similarly, there is the presence of cheaper labour thus the overall cost of production would be low. A huge population especially of youths implies that the amount of people who would be willing and available to work at the exaisting wage levels would be higher, therefroe the producers and capitalists would have it easy in this respect. There would be the prospects of cheap and available labour. On a national scale and level, population brings to the fore the question of employment levels and whether or not the existing materials and resources would be sufficient to feed the whole population. It becomes even trickier if there is a bulk of the population which is dependent-purely consumers, especially the elderly. This argument and line of thought is specific to the United States of America and China in relative terms and aspects. In the recent past, the Population in the United States of America has been noted and record that it grows at an exponential rate. The same is true in China, given the fact that China has a very huge population as it is. However, the life expectancy levels of Chinese people seems to be high implying that the population of the aging people in China would also be high. Thus, the expenditure of the aged population would be directly dependent on the others who work. Subsequently, this logic and argument at the macroeconomic level would imply that the unemployment levels would be high in proportional terms. As time proceeds, the gap between the rich and the poor would widen or there would be unequal distribution of income. The rich or the capitalist would be continue to amass more wealth while the middle income and lower income earners would remain at their levels or lower. This situation is true in China and the United States in the recent past. It is common knowledge that the youths in the United States of America and the republic of China are at an all-time high in terms of the unemployment ratios and levels. It is important and imperative to note and mention that their current pool of resources is inadequate to feed and meet the grown demands of the huge population-a portion which is directly dependent; the aged population. Conclusively, the above essay has drawn comparative parallels in terms of economic principles in terms of microeconomic and macroeconomic aspects. It is important and imperative to note and mention that there are several indicators and benchmarks of economic growth and development as stipulated in the above paper. They are not limited to technology, economic policies, taxation regimes and population as a holistic concept. Some of the above indicators are similar and definitive to both countries while others are unique in one of them. Nonetheless, the buck stops with respective governments and policies put in place to address economic issues. Work Cited White, Gordon, Jude A. Howell, and Shang Xiaoyuan. "In search of civil society: Market reform and social change in contemporary China." OUP Catalogue (1996). Read More