Economic Policy -Thoughts for Today and Tomorrow - Essay Example

Reflective Paper Name Institution Tutor Date Introduction Recently, after the financial downturn in the year 2008-2009, economics is progressively becoming a major focus of general competition across the world. Economics is considered a new subject in human sciences and is often applied extensively in all aspects of human life. For instance, almost all individuals have to think about money, tax, price and wellbeing in their real life. Thus, it is evident that economics plays a considerable role in shaping human life. The paper seeks to discuss the meaning of economics and explores how my knowledge of economics, economic analysis and economic logic skill can help me in my future career and daily life. Being a new issue in human sciences and being that its history is not protracted like other sciences, there are several theories that attempt to provide the meaning of economics and various schools differ in their meaning and definition of the subject. Ludwig von Mises (2006), who is an Austrian economist provides his idea about economics and feels that it is a theory of all the actions of humans. He further states that economics is a broad-spectrum science of irreversible categories of action under which humans’ act. By the use of human action, Mises means that human action is a determined behavior (Callahan, 2004). According to King, Gans, Mankiw and Stonecash (2012), economics is the analysis of how society manages various scarce resources. According to them, there are principles, models and theories which show how the market operates. Economics attempts to provide an elaborate explanation of how wealth is created in the society and how it is distributed. In point of fact, there is no exact answer to what economics is and most individuals tend to provide their view of the subject. In my opinion, economics is very vital for individuals since it attempts to teach individuals how to be objective in their thinking and deal with things more efficiently. Economics focuses on microcosmic and macroscopic view of factual life. There are several economic theories that can I can use in my future life, they include, the supply and demand, classical theory, Keynesian theory, monetary theory and Marxist theory. Economics is critical in my life. I can apply economics in every aspect of my life and improve my well-being in society. First, there are several government policies that affect supply and demand of various products in the society. An example of such government policy we studied in class is subsidy. The government subsidizes the price of related products within the society. This knowledge of government subsidy is important since I am able to pay less for the products and prevent manipulation from traders. With reference to the Keynesian theory which states that, the government should help the society’s economy (Gans, King and Mankiw, 2011). The government should step up and help the economy during the depression period and set up various strategies that can lead to better economic development within the society. The knowledge of economics can help me make more profits in future. Economists have summarized various economic theories such as classical theory, Keynesian theory, monetary theory and Marxist theory that can show various economic trends, hence, making it possible to follow economic laws to figure out future trends in economics (Kishtainy, 2012). Through these economic deductions, I am capable of investing in some business that can lead to considerable profit in future. For instance, when the price of stocks is likely to rise in future, I would purchase more stocks when the price is still low and sell when prices shoot up. Through this, I am capable of gaining more income. Furthermore, the knowledge of economics will give me various skills on how to save and spend my money and avoid unnecessary wastage. For example, I am capable of using supply and demand theory to deduce when the price of goods are low hence saving more money compared to other individuals. Knowledge on economics can help me further my career and probably become a good accountant or economist in the near future. Individuals who are proficient in economics find it easy to land a well-paying job than others. This is because most of the well-paying jobs are associated with business and such jobs require the knowledge of basic economic theories such as classical theory, Keynesian theory, monetary theory and Marxist theory to control and manage. Such jobs include accountants, business managers, Stock managers and many more. After my graduation from the university, I can be in better positions to obtain these jobs (Kishtainy, 2012). Economics provides a better understanding of individuals’ situation and cost of conducting an activity or of production. Form the lesson, most individuals would wish to save more money and most companies maximize on their profits and attempts to limit wastage in their production processes. Most individuals often fail to account properly for the cost of their actions. For instance, an individual spends a lot of time for home improvement. Possibly the individual performed the task for sheer enjoyment. Some will say that the person did the work himself to save some money. They will argue that the cost of doing the project professionally would have cost $ 7,000, yet the person managed to do it at $1,000 (Callahan, 2004). However, an economist is at a position to indicate that the calculation is defective. The individual has not considered the cost of the forgone opportunities. If he took over 100 hours to complete the task, and he would have used the time to earn $ 8,000, the individual has suffered a large loss by completing the work by himself. Thus, economic knowledge can help me understand my situation and avoid making mistakes in all my activities (Callahan, 2004). Economics can also help me in my day to day life. For instance, individuals are often confronted by different wants in daily life. However, there are fewer resources to satisfy the wants. During the course we learnt about markets and cost of production. I categorically took note of the fact that the cost of production greatly affects the cost of market supply. This is apparently true even in the context of daily life. When the cost of production for suppliers is high, it affects the allocation of resources which further affects economic wellbeing of the consumer. A case in point is when as a consumer a higher market price is offered to me, I usually feel that the amount I am willing to pay for good minus the actual price that I pay for it do not exhibit efficiency . The implication is that at one point I would find an alternative or substitute good. Additionally, the study of economics can help me optimize resource usage and avoid pollution of the environment. Recently, the amount of resources that are available is continually reducing due to the increasing birth rates in the country. This condition is likely to worsen in future if individuals keep on using their resources with low effectiveness and efficiency. Resources should be utilized effectively and efficiently to avoid wastage. Through the study of economics, I am equipped with several mechanisms with which I can use to look for possible ways of optimizing resource utilization and thus reduce wastage in all my day to day operations. In the lesson, we studied about externalities and the effects of externalities. Negative externalities affect the surrounding environment and include pollution of the environment. The lesson provided various ways of solving externality problem and several policies that can make the environment safe for all. Thus the study of economics has helped in creating a sustainable environment where all individuals can freely live and survive (Akerlof and Kranton, 2010). In conclusion, Economics is very vital for several areas of society. Knowledge of economics can help advance living standards and make a society a healthier place to stay. Economics is like science since it can be used to promote living standards. As a student, economics is critical to me due to its strong relation in my daily life. Economics can help me advance my career and help me face certain life challenges. Moreover, it helps me understand the modern world and give me a hand in making several future decisions. Also, it helps me understand various problems which come as a result of limited resources. Besides all these, I am capable of understanding different functions of various financial institutions and banks and understand information which relates to economics. References Akerlof, G. A., & Kranton, R. (2010). Identity economics. The Economists' Voice, 7(2). Callahan G. (2004). Economics for Real People. Austria-Hungary. Ludwig von Mises Institute Gans, J. S., King, S. P., & Mankiw, N. G. (2011). Principles of microeconomics. South Melbourne, Vic: Cengage Learning. Kishtainy, N. (2012). The Economics Book. Maher, J. E. (2001). What is economics? San Jose, Calif: Authors Choice Press. Von, M. L. (2006). Economic Policy: Thoughts for today and tomorrow. Auburn, Ala: Ludwig von Mises Institute. Read More