Chapter 22 Reflection

     I found many concepts interesting throughout this course changed my way of seeing economics and had a lot of fun learning about them. Even on a day to day basis I was able to see the different parts of economics we were learning about at work. The biggest things that I learned about were all the small parts that effect the economy in big ways especially with exports and imports.

     The short run trades off between inflation and unemployment because as the inflation rate rises unemployment becomes lower. However if inflation rate decreases unemployment begins to increase so an economy must find a good median where the inflation rate is not to high or too low so that unemployment is not too high or low. There is not a long-run trade-off because this is expected inflation that an economy is able to adjust and even out the unemployment rate. The short-run will not last for a very long time because as time goes by the economy is used to a higher rate of inflation.

Chapter 21 Reflection

    As consumer confidence declines the consumers spending drops during a recession. Public policies can help consumers to save money to help them to spend later by putting higher or lower taxes on certain objects. In  a boom consumer confidence increases and at the same time consumer spending increases because of the wealth of a household which in turn increases income for the nation and helps the production of goods. I think that policies are more effective when achieving economic stability because even though it could take a few months for the changes to occur they change. This shows that reactions need to be quick to adjust the economy and to fix them in the correct ways to benefit the economy.

Chapter 20 Reflection

     This chapter talked about economic fluctuations and how they are always changing and are very hard to predict. Fluctuations are always happening in the economy and one of the biggest and most recent was in 2008 and 2009 where the unemployment rate jumped by 5.6 percent between 2007 and 2009. This lead to falling incomes for families as well as many unemployed during the depression which didn't help those just graduating since they couldn't get high level jobs and employers were forced to lay off lower level workers. Another big point in this chapter was the aggregate demand which depends on the price levels of consumption, investment, government purchase or exports. This shows the effects of changing prices and how they can affect an economy for the better or worse and help them to thrive or to spiral out of control. The other side that also effects the aggregate demand is the aggregate supply which depends on the labor, capital, natural resources and technology that are being supplied to a country. This also can make or break an economy depending if another country can make goods cheaper as well as if the supplies coming into an economy are too expensive. In the end this chapter shows how easy it is to fluctuate a countries economy with relatively small changes that will either allow for an economy to prosper or to sink like a rock.

Chapter 19 Reflection

1. What is the market of loanable funds?
Adequate response: It is the place where everyone goes to deposit their money into their savings.
Very good response: The market of loanable funds is where people go to deposit money into their savings and where borrowers go to get their loans.

2.Why does net capital outflow equal net exports?
Adequate response: This is because the purchases and sale of capital assets abroad is the same as the exports and imports of goods and services.
Very good response: Net capital outflow is equal to net exports because the imbalance between capital assets in other countries is the same as the imports of goods and services to the U.S. from other countries.

3.What is a trade policy?
Adequate response: Is a government policy that influences what is imported and exported from a country.
Very good response: A trade policy is a government policy that affects the quantity of goods and services that a country imports and exports. 

Chapter 18 Reflection

     My first favorite margin note in this chapter was converting marginal product of labor to show how much a worker can create. This shows that even if one product may not cost much if a worker produces 100 more the revenue greatly increases. Second is finding the value of marginal product by seeing that when output prices change it also changes the value of the marginal product as well as the labor-demand curve shift. I like this comment because it shows that one piece changes all parts of the equation in different ways and when you want to change one thing you really need to be looking at the parts it will affect. Last is that with a diminishing marginal product means that their is a abundant supply and a low marginal product or low price. This shows that when a company makes too many of one product it actually lowers the price of the good.

Chapter 17 Reflection

     The costs of inflation include hyperinflation, shoe leather costs and menu costs that all play crucial roles in different ways. Hyperinflation is when a country has a very high and usually accelerating inflation and smaller money becomes worthless. Shoe leather costs is when a countries inflation rate encourages citizens to get rid of their money holdings. Last menu cost is when a company is constantly changing its prices to every small aspect they change. I think that the most important is shoe leather costs because it can deplete a countries wealth very quickly if many citizens quickly get rid of their money holdings and cause a quick and big inflation rate. 

     Deflation can lead to falling prices and in turn causes companies to lay off workers and cut pay to others. It would be a problem for all those who take part in the economy because as prices fall and pay falls unemployment rises and the poor get poorer and the rich also begin to loose some of their wealth. It also would cause less demand for specific goods and services because people will not want to spend the extra money with their wages going down.

Chapter 16 Reflection

     Cash I important to the overall money supply because cash helps the banks to increase the money supply buy giving loans with an interest rate to increase the flow of money back into the bank. As well without cash you could not have credit or debit cards which would collapse the overall money supply.
     The Federal Reserve Board and the Federal government are related because they both use the open market to increase or decrease the money supply. By selling bonds to the public the money supply will decrease on the other hand if they buy bonds they will increase the money supply.