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.

Chapter 15 Reflection

     There will always be at least some unemployment for several reasons such as different industries fluctuate through the different seasons and may have to lay off a few employees in a certain season. Another is that some people don't want to work especially if they are receiving something like welfare that gives them a small income and they don't have to work.

      Public policies can affect the amount of unemployment in both good and bad ways. A good way would be the government creating a program that helps people to find the jobs they want to be in and better trains them for the job. On the other hand they can affect unemployment for the worse such as if the government raises the minimum wage too much which causes companies to lay off less skilled workers to try and keep the best of their workforce with the higher wages.
     Unions can affect unemployment as well by raising the wages of worker above the equilibrium point. This causes the demand for quality labor to decrease and therefore results in higher unemployment when they were trying to help all in the union.

Chapter 14 Reflection

      One trade-off that I have had between risk and return is with gambling at central city. The higher the potential winnings the higher amount of money you risk to win. This often makes me stay to lower cost games where I have less risks of loosing money however the return is not as good as the higher risk games.

     The present value of a dollar is more valuable than its future value can be shown with the example of buying a new car. If you buy a new car the minute you drive it off the dealership lot the price of the car decreases. As well as you put miles on the vehicle and have it for a few years the value will continue to decline as newer and better versions continue to come out that people want more.

Chapter 13 Reflection

     Private savings impacts investment with people putting money into their savings accounts the bank is able to lend out more money for other people invest in a new business or things they need. So the banks need to have money from others savings accounts to be able to lend money to people that will pay the money back plus some interest. It is important for people to save money in an economy because their saved money helps to keep the economy healthy. Without people saving money the economy could begin to dwindle and this could lead to a depression.

     Public policies like tax policies affect saving rates in either good or bad ways which will either encourage people to save or discourage them from saving. An example of a tax policy that will encourage saving is a policy that encourages economic growth that raises revenue without hurting those who are putting their money into savings. A example of a tax policy that discourages savings is such as having to pay double taxes on certain savings accounts such as IRA's. Government budget deficits affect interest rates because when the government spends more money than they make from taxes the country continues to pile up debt. As the debt continues to climb so do the interest rates to provide a better return since the risk continues to climb.

Chapter 12 Reflection

     Human productivity is affected by many different things that include labor and capital as inputs. Whereas the output is usually measured in the revenues as well as other GDP components such as the amount of inventory a business has present.
     Public policy affects the availability of resources that people need to be productive by changing factors in a community. These include the public policy affecting access to food, housing, health care and education which help everyone to be more productive in any of their  daily routines.
     If the government lowers the tax rates it will encourage people to save more money and spend less. This will boost savings accounts at banks which then allows them to loan that money out to people wanting to make investments this shows how public policy can promote productivity growth over the long term as the economy grows.

Chapter 11 Reflection

     A single person cannot change the rate of inflation with what they purchase because with using the CPI it is looking at how much goods are changing in price and what the majority of people are buying. So if only a few people are changing what they are purchasing for a better alternative the CPI will most likely not change because a majority of the people are still purchasing the original. As well over time the CPI continues to get more and more out of date and therefore is overstating the rate of inflation.
     Yes the improvement in goods causes more distortion in the CPI as you look at how much cars have improved from the 1980's to today you can see how many more options are available in comparison. In turn a car in the 1980's was much cheaper than a car today but when you look at all of the features that come with a new car and how much they cost it makes the price between the two not look quite as bad.

Chapter 10 Reflection

     Intermediate goods are goods that are sold to be used to make a final good such as cotton an intermediate good which can be made into clothes which would be a final good. We care about this because you need intermediate goods to make most all final goods and the prices of the intermediate goods help to determine what the price of the final good will be.

     GDP is not a good measure of well-being because it only measures the sum of all the final goods produced in a country but only those that are on the market. It also does not show what the effects of a growing population are causing. As well GDP does not look at the effect to the environment with more pollution which can lead to worse living conditions and shorter life expectancies. 

Chapter 7 Reflection

     Efficiency from the eyes of an economist is getting the most out of a resource that is possible and on the other hand if their are gains that are not made from a resource it would be seen as inefficient. Producer and consumer surpluses are important for market equilibrium because if a producer values their goods to be worth more than the current market value they will not sell their product as well if a consumer values a product at less than the producers are selling the good for they will not buy the product once you determine these values you can find the zero point or the equilibrium of the market. I don't believe that market efficiency should always be a goal of policy setters because you will end up with too many of one product that you are not able to sell because it is valued too high by the producer or on the other hand you will end up with not enough of another product because the value is set too low and you will never be able to reach a market equilibrium and therefore you will not be efficient in the eyes of an economist.

Chapter 6 Reflection

     This story in the New York Times relates to chapter six with how the government stepped in to lower grocery prices so that the poor can afford groceries to feed themselves as well as their families. Now however the companies making these goods and selling goods cannot make any money and if they do it is very little so they have stopped manufacturing or carrying certain items that families need for everyday life. Which is causing the people of Venezuela to wait in line for hours to get some flour or cooking oil.
     If price controls would have been imposed on bottles of water after Hurricane Katrina it would have ended up much the same as it did in Venezuela. The people in the front of the line waiting for water could get as much as they could grab and pay for all of it and those later in the line would not receive any if price controls had been imposed. However with having price controls everyone could receive a few bottles of water because the people at the front of the line couldn't take as much as they wanted because they could only afford a few bottles of water.
     In this article it talks about Los Angeles minimum wage increase to $15.00 dollars an hour making it into the biggest city to raise the minimum wage. However many people do not think about the downsides to raising minimum wage while it may seem a good way for everyone to make more money. If you look at it from the manufacturers standpoint they now must raise all of their workers wage to $15 dollars an hour which in turn will increase their manufacturing costs and that will also raise they price of their goods or force the company to lay off some of their workers to make the same amount.
http://www.latinpost.com/articles/59621/20150614/los-angeles-becomes-biggest-city-to-raise-minimum-wage-to-15-an-hour.htm

Chapter 5 Reflection

     One sale based on price elasticity that I recently took advantage of was a package deal where if you bought one led light bar you received six free led light pods. This is a way that the company was able to attract many new customers by buying a item that is high in price and adding other lower price items in for free. This worked for me specifically because I was looking for an led light bar for my jeep and the addition of the free light pods peaked my interest and made me buy with this company instead of one of its close competitor. As well they will most likely keep my business now because they have deals such as this one monthly and they sell very high quality products.
     The topic that made the least amount of sense to me in this chapter was how to change the graphs as the markets would change. It was hard for me to figure out which line I should change and in which direction to change it. However with more practice I am getting better at it and I am understanding the topic a lot more as I continue to practice these types of questions.

Chapter 4 Reflection

     I think that with Uber and Lyft taxi medallions would rise in price because with these services it would be easier for the taxi drivers to get fairs and they would not have to constantly drive around looking for people in need of a taxi. I think this would raise the price for taxi medallions because of the ease of finding customers and saving the taxi drivers from putting numerous miles on their vehicles and along with that the gasoline they burn looking for customers. I believe that the demand for taxis will stay the same. However I think the supply of taxis may go down a little because with the ease of getting a taxi to your location and not needing a lot of taxis in a general area because they can get exact locations for their next customers and when the customer wants them to be at the location.
     One example of a good that changed rapidly was in the mountains they opened a spa shop that sells hot tubs and for the first year or so business was booming. Before their store had opened there was not a store like this in the town or any nearby towns and it encouraged those who had been paying to go to the recreation center to buy their own hot tub instead of paying to use the rec. centers hot tub. However it was a very limited market for those who could afford hot tubs and many found it cheaper to just pay to use the rec. centers hot tub. In the end once people bought their hot tubs they didn't need another one until theirs broke. The store ended up going out of business but in turn it allowed another business to come into town that repairs hot tubs and their business has been able to thrive on fixing household hot tubs.
     AirBnB affects the supply of rooms for rent in San Francisco by the amount that they charge for the room per month. This will determine the demand for the property by who can afford to pay the allotted amount each month. As well they can lower the price of rent which if they had more properties for rent would increase the amount of people who would be able to afford the monthly rent.

Chapter 3 Reflection

    The concept that surprised me the most in chapter three was thinking about how a country must balance the goods they produce to make balance between the many goods and not to make to many or too few. However this is where trade could step in and help them acquire good that they couldn't produce or that was too expensive for them to produce.
    My view on international trade is that it is a very good thing to have for every country. With international trade countries are able to get everything that they need in exchange for goods that they have in excess. My opinion changed only a little and it helped me to look at international trade even better. This chapter made it easier for me to see how it is cheaper for different countries to make a certain good and they can find another country that needs that good for some of theirs.

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    A recent purchase that I made that was mostly made overseas were beadlock wheels for my jeep. There are a few that are produced in the U.S. but they tend to be a lot pricier and didn't come in the designs that I wanted. The wheels that I ended up buying are from a company in Colorado but most of the material comes from China. There were not many trade offs to buying a beadlock made in the U.S. other than the price as well as the design that I wanted to complete my jeep.

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Chapter 2 Reflection

    These simplified models help to see different aspects of economy such as trade. Instead of having dozens of different materials being traded if you only use two materials it is much easier to see such things as who is benefiting from the trade and why it is cheaper to trade for some materials than it is to manufacture them. As well as to see which nations can make materials for cheaper and would be more willing to trade for other materials that are more expensive for them to make.
    A statement such as "Government should provide all citizens with healthcare" is a normative statement. Which means that it is an attempt to show how the world should be as compared to a positive statement which is a claim that attempts to describe the world as it is right now.

Chapter 1 Reflection

One point that made me think differently was how governments can improve market outcomes by things such as enforcing property rights. I never thought about how having cops around can repel criminals and help everyone have a sense of security. Such as when you leave your house in the morning you don't think about someone mugging you as you walk out the front door. However in some countries it is clear that the government could held improve market values by enforcing property rights. Places such as Nicaragua where you see farms with armed guards to protect the harvest is a clear sight that the government could help enforce property rights.

A new question that I have about the US's economy is if our standard of living will go down with more of our products being made in China. With so many of our daily necessities being made in China or other countries around the world and jobs continuing to be sent overseas I wonder if we will see the US's standard of living begin to go down.