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Economists Brad DeLong and Stephen Cohen have expressed in their book, The End of Influence that as other nations are rapidly gaining economic power, people will soon experience a major change in life style. People have conventionally tried to associate themselves with America in terms of culture and life style because Americans, being rich, have been idealized. In the recent years, the free-market capitalism has put American economical stability into crisis and has transferred the power to the economy of emerging nations as India, China and Latin America. This transfer of economical power will soon put an end to the long sustained dominance of American ideology, culture and fashion over other nations. This will essentially be an end of “the neoliberal dream”. It is being realized that in early 2000s, policymakers in America unnecessarily became too satisfied with the trends of economical power and stability whereas the actual situation required them to think otherwise. Some economists are of the view that banks should look forward to an inflation target of 4 % instead of the targeted 2 % so that they can manipulate things as required. Blanchard suggests that raising the inflation now would ease the monetary policy during financial crisis, and the fiscal positions would thus be saved considerably.
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For instance, Adam Smith’s theory of the invisible hand argues that when people engage in business and selling they are governed by the invisible hand of the market that helps regulate prices and ensures that businesses and people act in certain ways. Indeed, the nature of economics is like psychology in that it presents theories of human behavior.
As such, economic analysis relates to the study of economic systems in an industry to ascertain the effectiveness of the operations of a given industry with reference to its profitability1. With this, we are able to establish the optimum use of the limited resources to achieve a given economic objective.
Thus, short-run is the time period that quantity of an input or at least one of the many inputs is fixed while other inputs’ quantities can vary. Long-run on the other hand is that time period where inputs in entirety can be varied. Therefore, there is no specific time that can be taken as fixed or even marked on the dates of the calendar to distinguish short-run from the long-run.
If the quantity demanded of a certain product changes minimally or does not change at all, then that product is said to be a Price Inelastic Good. Consequently, if a product whose price increased and such a change brought forth an abrupt drop in quantity demanded of the same product, the good is said to be Price Elastic.
e that the people of a country would receive the best of every thing that could be education, housing, health services or the other various basic necessities.
Economics has been called and is known as a Social Science one that actually focuses on the subject matter that is
sought to apply a broader theoretical and conceptual tradition of economic thought by placing emphasis on neo-classical synthesis – a combination of neo-classical economics and Keynesian economics.
Conservative economics is based on Milton Friedman’s teachings and
s the above figure illustrates, if there is a supply shock in an economy (such as increase in the price of oil, labor or other costs that increase the cost of doing business), the short run AS curve shifts to the left. The real GDP decreases from Q to Q’ and the price level
These tools enable professional mainstream economists to address various economic issues facing the world. Mainstream economics is about modeling in a way that traditional or heterodox economics is not. It originated from the neoclassical synthesis of the neoclassical
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