As mentioned previously, Adam Smith, a highly regarded economist, demanded that in order for economic success, the”invisible hand of the market” must be in control, rather than the government. This notion involves the establishment of free enterprise and greater openness to international trade and investment (e.g the abolition of tariffs). Free enterprise results in the value of various goods and services being determined by supply and demand meaning that suppliers are unable to manipulate prices. It also encourages investment as people can see the potential to make a return – without the government capping prices. On the other hand, this idea of free trade is highly disadvantageous, and even harmful, to the Global South with the Global North dictating prices.
Dear Editor: As I was reading the articles about Jeremy Lin I noticed that the media focused on the facts that Lin is Asian American, religious, and a graduate from Harvard. The media places most of their attention on other aspects and not mainly how great of a basketball player Lin is. To me it was as if the media was saying that Lin is a good athlete because he is a religious Asian American that plays great basketball instead of just saying that he is a great basketball player because of his skills on the court. Society has created norms that make people think that only a specific race or ethnicity is good at basketball, and when someone comes along that has a different ethnicity and goes against that norm, like Jeremy Lin, it becomes this huge story. I think that the media should stop worrying about aspects like religion and ethnicity when they say how great an athlete is, and just focus on the athletes skills in that sport.
While the traditional accounting methods are good to measure past performance and financial stature, it does not allow for managers to see the impact or value that marketing has on the bottom line. For a manager to evaluate the impact of marketing they will need view the current marketing expenditures, sales, and profits to make a conscious decision on what methods are working. While I think placing marketing as an investment is a good concept, determining the value is too biased without a common measurement between all companies in a similar industry. Without understanding the current value of marketing, the marketing budget will be one of the first items cut when the business is in a downturn. Technology in all industries has increased dramatically over the past 10 years so being able to understand the current value of marketing methods should not be as strenuous as it has been in the past.
There seems to be no agreements Shiller and Fama can have the subject of asset bubbles since the two have different opinions on how the market behaves. However, one important conclusion of this analysis suggests that the two scholar's different views may be based on the same fundamental idea. An asset bubble, or an economic bubble, is usually defined as when prices appear to be driven by investor's incorrect views instead of the intrinsic value or the fundamental of the assets. While Eugene Fama denies the existence of the so called bubbles, Shiller proves the existence of bubbles with a description that includes rapid increase in prices and the investors getting emotional with the increases. Shiller's description of the bubbles is quite convincing.
The fed has to set a lower reserve requirement, which allows banks to loan out more money, which generates more interest, which could lead to periods of inflation and could have worse consequences if the government does not react quickly enough. Inflation would decrease the purchasing power of an individual's money, which would lead to more saving and less spending. (Fried) Less spending would mean less money being injected into the circular flow of our economy and would lead to economic crisis. However, many critics also use this to determine how national debt does not have a huge impact on the economy. A huge national debt has no effect on the money market.
It is not necessary that market participants know about the invisible hand but how the invisible hand operates in regards to consumer’s wants and needs and how those needs help stabilize and regulate the market through supply and demand. 3. Use the demand curve graph found at the following link to answer the questions that follow. a) How would point A be represented as an ordered (x,y) pair? (QTY=20/price=$24) b) What does this curve show?
Policymakers in the government can respond to the monopoly problem by trying to make industries more competitive, regulating the behavior of monopolies, turning some private monopolies into public enterprises, or do nothing. Price discriminate means the exactly same product could sell to different consumers for different prices, even though the costs of producing for the products are the same. Price discrimination is impossible when product is sold in competitive markets. For a firm to price discriminate, it must have market power. There are three lessons to be learned about price discrimination are price discrimination rational strategy for a profit-maximizing monopolist, price discrimination requires the ability to separate customers according to their willingness to pay, price discrimination can reduce the inefficiency inherent in monopoly.
Economic Theory of Poverty Aimee Vroman Strayer University Econ Problems and Issues ECO 405 Professor Charles Fairchild November 6, 2011 Abstract When it comes to poverty, we live in a double standard society. On both sides of the political arena, they use poverty to their advantage and yet refuse to do anything about it. On one side we speak of one person, one vote and equality of opportunity and on the other side classical economics theorizes that the existing income inequalities and the resulting wealth inequalities cannot be eliminated by state intervention. Such interventions lead to decrease in national income. Income and wealth inequalities in an economy are common.
Exponents of the capitalism are of the opinion that the government interference will lead to inefficiencies in the utilization of economic resources. They strongly advocate that private enterprises motivated by maximization of profits will lead to advancements in society, which will ultimately benefit everyone. Proponents of Socialism are of the contrary opinion. They believe economic inequality will not achieve the overarching goals of the wider society, and the government is ultimately responsible for reducing any perceived inequalities through programs that benefit the less able members of society. Capitalism is an economic system characterized by private or corporate ownership of capital goods.
The taxpayers are not happy with the public services from the government and seek help with out having to pay taxes. It is feared that this act will make it hard for the government to finance the public goods necessary for the economy and society. The underground economy should neither be identified with illegality. Some activities are perfectly legal but are not subject to taxes, and therefore escape measurement in official statistics. Other activities are legal as such, but taxes are evaded.