Economics Essay

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David Geter GM545 Prof. Friedman 06/12/2012 Macroeconomic Foundations and Microeconomic Foundations, Balancing Long Term Productivity and Short Term Productivity in the U.S. President Friedman let’s start by having a conversation about the effects current polices have on the future. Far too often our country loses site of macroeconomic foundations because our country is too often wrapped up in microeconomic polices. microeconomic policies have overshadowed macroeconomic policies concerning productivity and competiveness of the United States. In the economy that we live in politicians typically rant and rave about economic policies and legislations that have a microeconomic penumbra overshadowing macroeconomic foundations. Macroeconomic foundations cater towards long term productivity and competiveness, whereas microeconomic foundations are tailored towards short term productivity and competiveness. Although microeconomic policies receive more attention than macroeconomic policies in the U.S., if the United States wants to effectively balance long term productivity and short term productivity, it must then lead with macroeconomic principles that steer microeconomic ideals. Microeconomic policies are policies that are “…aimed at individual parts of the economy, especially industries, markets, businesses, and households. Microeconomic policy is usually concerned with promoting the micro goals of efficiency and equity. Common microeconomic policies are judicial and regulatory” (Economic Glossary, 2012). Microeconomic policies are policies that usually govern labor and America’s workforce, America’s physical infrastructure, and regulatory complexities. Microeconomic principles are “… tied to [local amenities] such as roads, universities, [social services, and much more]” (Porter and Rivkin, 2012). Microeconomic

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