Mastering the fundamentals of the economy makes it possible to decipher economic news. You can do this in a more structured way with models and tools to be applied in reasoning. This makes it possible to create links between the different events, points of view, and currents of thought.

Admittedly, economists do not always have enough information to know. You also do not know exactly the world’s oil supply on which you can count or the resources required to eradicate famine.

However, thanks to the knowledge acquired in the field of economics, you can become a better manager.

Learn economics to be a better citizen

Knowledge of the economy still makes it possible to be a better citizen. This is especially possible in the context of economic and social crises. Professionals and students in vocational training, for example, can acquire economic reasoning.

For many years the United States Government encouraged American businesses to sell their products overseas. However, for the recent years America is buying more goods than they sell t other countries.

Moving further here are some vocabulary we should first understand, import is buy goods from other countries and export, is to sell goods to other countries.  A trade deficit occurs when you import more goods to other countries than you export. Trade agreements are made when countries when the government encourages trade between their countries. A trade agreement is just what it sounds like. It is an agreement among two or more countries that increases trade by making it more beneficial for both parties. But when they want to discourage trade among their countries, a trade barrier is formed. This is an obstacle to trade between two or more nations. A good example of a trade barrier is tariff or a tax on imported goods. Tariff make it more expensive to buy or sell imported products and therefore discourage trade.

We have what is called a traditional economy which involves hunting and gathering, basic sustenance farming, herding cattle etc. This type of economy is in very short supply in today’s world. The two basic forms of modern economy are the market economy or capitalism in which a free exchange of goods happens with the government intervention. We also have the planned economy in which the Government has total control over the means of distribution, such as Communism and Socialism. Most economies are mixed economy which is a combination of planned and market economy. Planned and Market economy is not complex. In every situation, if you have something that is scarce, you have to figure out a way of distributing this resource. Scarcity exists when not enough of a commodity is available to satisfy all of the wants at a zero price. When this happens economies usually ration. This is a way of rationing resources. A rationing system is just a way of distributing or who gets what. In the free market prices indicate this. In the planned economy it will be the Government to decide.

We as humans are incredible in creating and inventing things. We are seriously skilled and talented and we continue to becoming better. As we do so, there is an opportunity to redesign and rethink on how we create things. Can we design products that is made and can be made again? And can we power the whole system with renewable energy? Can our innovation and creativity build an economy that can restore and regenerate? The answer is Circular Economy. This replaces the traditional linear model in which we dig stuff out of the ground, turn it into something, consume it and then put it back to the ground as trash. There are many issues that we should address to have a more sustainable future. Each of us have the potential to help achieve this. Here are a few things we can do to practice circular economy to achieve a sustainable future.

1. Fashion. A common trend is to keep clothing for a shorter period and wear it a few times before it’s considered old. But a growing interest in sustainable clothing is to repair, resell and remodel clothing while still giving the desired uniqueness. Because of online retailers and resellers, it’s likely that there will be an increase in people purchasing second hand clothing in the next 10 years. We are in track to have second hand clothes make up a third of our closet by the year 2033.
2. There are companies that are embracing this circular economy. Many use recycled materials by upcycling old products such as old tires and plastics.
3. Somethings are just too good to waste. Just like food. Many recycled old foods to food for pets.

There are many factors that causes economic recession or depression. The most common reason for economic reason is mostly political, the Government and its Central Bank decide to stimulate the economy. The GDP of a country can shrink drastically. This means the output and wealth of its country is also shrinking. If this pattern last for 6 months, then we can consider it a recession. If it last longer than 6 months, and becomes severe then it is termed as a Depression.

The Government can try to minimize recession and stimulate growth through the following policies:

1. Fiscal Policy. This includes actions such as Government spending, lowering taxes and racking up budget deficits. The goal of a Fiscal policy is to get the people, company or Government agencies to spend in an attempt to increase output in the country, grow wealth and increase the GDP.
2. Monetary Policy. It has the same goals as Fiscal policy. But rather focusing on spending it emphasizes the supply of money. The idea is, if money is more available people will do more spending and more investing. This is enacted through:

• Changes in the discount rate.
• Changes in the reserve requirement or the amount banks are required to keep on hand
• Open market operations or by buying bonds and stocks.

All these actions goal is to aim to increase money supply so that consumers and businesses can borrow more easily and consume and invest even more. Most government target an increase in money faster than the rate of growth which can cause inflation or the rise of prices. A small amount of inflation is seen as a good thing and can be an insurance against recession. However, if Governments are too aggressive in increasing the money supply the rate of inflation increases dramatically causing hyperinflation which can be devastating in economic growth.

Productivity directly impacts the economy. It is defined as the measurement of the efficiency of the production process. It is the relationship between inputs and outputs. This can be applied to the individual factors of production.

Labour Production. This is the most widely used measure and is usually calculated by dividing the total output by the number of workers or the number of hours worked.

Total factor productivity attempts to measure the overall productivity of the inputs used by a firm or a country. The quality of different inputs can change significantly over time. There can also be significant differences in the mix of inputs thus firms and other countries may use different definitions in their inputs especially on capital. The difference in living standards will greatly reflect differences in their productivity.   The higher productivity in a country is good for its economy.

Gig is a slang term meaning a job for a specified number of time. This term is often used by bands for a one off musical performance. This word has found its way on the mainstream business vocabulary as more communities nowadays trend to the Gig economy.

A Gig Economy is defined as a free market system in which temporary positions are common. Some good examples of this are Freelancers, Independent contractors, project-based workers and temporary hires. They are also called “Gig Workers.” They are commonly found in many industries. They can be writers, ride share drivers, photographers, accountants, realtors, handy man, tutors or anyone who enters into a formal agreement with a company to provide services without being in the company’s payroll. With the digitization, the workplace now is becoming more mobile. Many employees now can find many jobs across the world and employers can find the best individuals for a job without as much geographic strain. The Gig Economy also saves business resources like benefits, office space, and training while providing employees benefits like the freedom to select jobs or gigs that they are interested in. While this flexibility is appealing, gig workers trade this for little or modest pay, little or no health benefits or retirement benefits.

Protecting our children and teaching them the basic skills if very important to one’s economy. A country with a prosperous economy has a strong foundation that focuses on education. They train the younger generation to perform well. Learning these basic skills through primary education is very critical for a child’s social, physical and intellectual development. Their understanding of basic health nutrition and sanitation is also incorporated into the educational curriculum. All this factors would have an effect to the nation’s economy. The completion of education has proven lasting benefits to the basic unit of the society which is the family. This is also beneficial to the country’s economy.

The Power Of Education: Boosting Economic Growth In The Long Run

The world economy is encountering an erosion of globalization. The ties of monetary and business opportunities over the world is wearing away creating more bigger holes in it. Globalization is multidimensional, it is not only limited to International trade but more than that. Yet we focus more on trade. We forget to think that what matters for mankind is the quality and not the quantity.  The good qualities that should come with Globalization is fading.

People around the world want to live in peace. They make there life meaningful by making a modest living. People find contentment when they are able to bring their children to school, provide for their families and secure their future financially. This is the dream of every family globally. This dream of every family globally has become a reality for the majority, mostly because of the good economy. But so much has changed and this goal has crumbled down for many during this pandemic. It has placed many economies at the brink of collapse. It has affected trade and commerce across the world. We became very vulnerable to this crisis. This problem is global and common to almost everyone around the world. These can be resolved by a strong will in Global Cooperative Action.

Many find the topic in Economics unappealing.  There are many terms to understand such as microeconomics and macroeconomics. Microeconomics or Moicroecon as most students call it helps us understand how an individual affect and contribute to the market which in turn affects the nation’s and world’s economy as a whole. In economics we find out that Consumer decisions would have a great impact on the global market specially on environmental health. We are all consumers, and a great chunk of people, young or old are entrepreneurs. Anyone can also be an Investor. The Purchasing power will keep getting high as many learn the trades of economics and as they enter the workforce.

Why YOU should learn economics!

As we learn and explore more about economics this will help boost the prosperity of a nation. When we are well educated we become more productive which is good for the economy. When our economy is good and prosperous, the people will be healthier and also better educated. Economics is a cycle, and learning about it is a win-win!

Economies can be broadly categorized into several types based on their structure and the way they function. Market economies are driven by supply and demand, with minimal government intervention, allowing businesses and consumers to make most economic decisions. Command economies, on the other hand, are centrally planned and controlled by the government, which makes all decisions regarding production and distribution. Mixed economies combine elements of both market and command economies, featuring a blend of private enterprise and government regulation. Traditional economies rely on customs, traditions, and beliefs to shape economic activities, often found in rural and agricultural communities. Each type of economy has its own advantages and challenges, influencing how resources are allocated and how economic growth is achieved.

https://www.capital-chronicle.com/