Econ. Week 2
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This 2 page Class Notes was uploaded by Sydney on Thursday September 15, 2016. The Class Notes belongs to ECN 101 at Saint Martin's University taught by Riley R. Moore in Fall 2016. Since its upload, it has received 4 views. For similar materials see Principles of Economics in Economics at Saint Martin's University.
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Date Created: 09/15/16
Chpt 1 continued Government Try to make forecasts. More accurate the closer it is. Further out time line=more uncertainty Economic OutputGross product 70% consumptionU.S To be leader in global market, need to export not just consume. U.S is not labor driven Nonprice factorsWay to be unique. Create niche or “monopoly”less competition ↳Consumers want competition because it drives down prices, more quantity and quality. Government grants patents for innovation. How Goal for every society Find optimal method of producing goods and services. “90’s was a game changer for technology. Economists thought ther would be an inflation burst. Technology made everyone more efficient. More output for every input. Inflation is normal in healthy growing economies because if not unemployment need to pay more to be competitive. Pricewage cycle.” Whom How economies output is distributed across members of society. Usually politically Distribution based on productive contributions, need or a combination of both ↳Being able to distribute shows how strong economy GDP is. Production cycle: Adds more benefits but exploitation of labor. Usually labor/capital Chpt 1 cont. Command based system One person makes decisions Pros: less discussion means things happen quicker Con: chronic shortages or surplus because it is hard to calculate what everyone needs when they can't say what they need Market based system More economic, less political science. “New idea” to have people apart of the equation. Works if people are rationalmore money over less money etc Pros: Empowers individuals to have jobs they will be efficient and have a reason to go. When people can choose what they need for themselves less chance of shortage/surplus. Cons: Process is slower China (command based) took lead out of gas in 1 year. USA (market based) took 20 years Selfishness Allow people to pursue own interests Adam SmithGov’t required to provide basic education ↳if illiterate, can’t engage in market, is a handicap for participating in market Laissez faire Free market, let people do their own thing Gov’t acts as referee Failed to see extremities when too much or little is produced. Failed to see monopolies The US changed from command based to market based in 1800’s public sector can drive private sector though agenda. Fairness vs. Efficiency ↳Socialism ↳Capitalism ← With good data can we have both? Debt time lines Bill < 1 year Note 12 years Bond 10+ years Revolutionary technologyCell phone. Able to tap into good ideas by empowering with education ↳Need financing Hyperinflation leads to political change fter WWI germany was forced to pay for damage→ hyperinflation because they printed money to pay back We accept money because we assume faith in the issuer. → The paper is worth nothing Resources are the main motivator for war Intrnational trade Major part in modern economics. Japan/U.K have to be aggressive to secure resources because they are on an island Input→ Value added→ outputs Want more output for input Need to figure out how to operate Monetary concept to produce enough without wearing out machines/people