Economics Critical Thinking

Part 1

Unit 4.1

  1. The US Bureau of Labor Statistics is responsible for calculating the US unemployment rate every month. The Bureau of Labor Statistics used data from the Current Population Survey (CPS) collected by the US Bureau of the Census and covers 60,000 civilian population members aged above 16 years (Marthinsen 73).
  2. The unemployment rate affects the US economy by reducing taxes, increasing debts, and reducing the economy’s contribution. High unemployment rates mean many people cannot afford to pay their debts, contribute positively to the US economy, and cannot pay taxes. The effect is an increase in interest rates from high unpaid debts affecting the growth of the economy. The inability to pay taxes by a high percentage of the population causes low revenue for the government resulting in a deficit and lack of finances for courts, law enforcement, and government programs.
  3. People question how unemployment is calculated because the calculation excludes unemployed people who are considered outside of the labor force since they are not actively looking for a job. These people do not count as jobless in the unemployment rate despite having given up on finding a job and not that they do not need one.

Unit 4.3

  1. Fair regulations boost economic growth by improving the predictability of economic interactions, reduce the cost of resolving disputes, and provide certainty to contractual partners and protection against abuse (Haidar 286). Regulations allow the smooth functioning of markets allowing businesses to invest in people and innovation, creating economic growth.
  2. The regulations alluded to in the article include the US Corporate Average Fuel Economy (CAFE) standards that regulate the US car industry and Basel III, which regulate the banking industry.
  3. Flexibility allows regulations to be changed to suit industry or market changes and provide a mechanism for laws that target wrong areas to be corrected. Flexibility will enable restrictions to be effective and focus on the right priorities. Flexible rules are useful in implementation and enforcement and allow the government to work with the industry to achieve a globally consistent framework improving the effectiveness of regulations.

Unit 5.1

  1. China’s economic growth is rapid and has achieved a sustainable growth path with a focus on achieving stability in the long-run.
  2. Ways to entice China to abide by international rules and make their market access to other nations include demonstrating the benefits from international cooperation and exchange, benefits of international trade, and offering China the capacity of rule setting in world trade. Other incentives include penalties to China for not abiding, including exclusion from global institutions until policy reforms and compliance to international trade and participation are achieved and ensuring China upholds promises to abide by international standards and open up.

Unit 5.4

  1. Bitcoins are problematic because of the requirement to understand computer security to use, lack of a mechanism to protect against fraud, high volatility, and technical weaknesses that make it vulnerable to attacks. Slow speed in processing transactions and slow rate of creation are other problems facing Bitcoins (Haldimann et al. 48).
  2. Having a fixed value will make Bitcoins a viable medium of exchange. This will ensure prices of goods and commodities do not fluctuate with changing Bitcoin value resulting in losses to consumers.
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Part 2: Benefits of the economy from immigration

The economy benefits from immigration through additional skills, knowledge, technical know-how, and innovation from immigrants improving production, global competitiveness, creating jobs, and efficiency. Immigration offers the United States access to talented immigrants focusing on science, technology, engineering, and mathematics (STEM). Science, technology, engineering, and mathematics have huge excellent innovation potential and facilitate improvement in productivity, efficiency, and capacity to utilize the country’s existing stock of skills for improved growth and development of the economy (Caret and Guzzi par. 3). This provides the United States access to the most productive workers, creating 2.62 American jobs. Immigration also provides the United States access to graduates, skilled workers, and entrepreneurs, improving productivity potential, increasing the stock of skills in the economy, and starting up businesses that augment revenue collection and create more jobs for United States citizens facilitating economic growth. Immigration offers the United States a platform to attract and retain the smartest and most entrepreneurial minds globally, showing the country a platform to achieve excellence in innovation, augment productivity, and improve the stock of skills and knowledge. These advantages are the economic benefits the United States derives from immigration.

 

Works Cited

Caret, Robert and Guzzi, Paul. “Economy will benefit from Immigration reform.” The Hill, February 14, 2014. https://thehill.com/blogs/congress-blog/economy-budget/198373-economy-will-benefit-from-immigration-reform. accessed March 2, 2020.

Haidar, Jamal Ibrahim. “The Impact of Business Regulatory Reforms on Economic Growth.” Journal of the Japanese and International Economies, vol. 26, no. 3, 2012, pp. 285-307.

Haldimann, Luc, Walter, Christian, and Brenzikofer, Thomas. Swiss Made Software. Swiss made software gmbh, 2016.

Marthinsen, John. Managing in a Global Economy: Demystifying International Macroeconomics. Nelson Education, 2014.

Weinberger, Mark. “Can Better Regulation Boost Growth?” World Economic Forum, January 21, 2014. https://www.weforum.org/agenda/2014/01/finding-growth-regulatory-change/. accessed March 10, 2020.