Category: Economic Problem

The CPI calculation in the inflation rate is considered as a combination of many goods, which are accumulated within the year. The same products are used in the following year and the next, which means that in the calculation of the inflation rates. The amount of goods and services used in the calculation remains the same with a slight change. On the other hand, the GDP deflator is calculated as a factor of flexible goods and services in the country. The changes in every year were due to the different factors that affect the economy is considered in the calculation of the inflation. Therefore, as the CPI follows the Laspeyres index, the GDP deflator follows the Paasche index.

On the other hand, the GDP deflator is a reflection of every good and service within the country with a general perspective of the market trends. The representative inflation rate is conclusive with all the factors considered. At the same time, the CPI uses a collective number of goods as the representative of what the market offers. The small amount purchased by an individual is the representative of the market. Therefore, it would be ideal to use the GDP deflator in the calculation of inflation owing to the convincing reflection of the system to the market trends. The GDP deflator produces results that are a representative of the whole market equation, which is the best system to use in the prediction of the market trend.

The increase in the Gini coefficient between the year 2001 and 2006 indicates an increase in income inequality in Hong Kong. The Gini coefficient represents a complete equality at zero and inequality as the value moves towards one. When a country has a Gini coefficient as 1.000, then the distribution of the economy revolves around a single person.

Wages are calculated as a factor of the market economy, the general output of the company or organization an individual works in, and the type of work an individual is tasked. However, the market economy is the primary determinant, which means that when the economy shifts, a change is also expected in the functionality of a company and the market prices. As a result, the wages and salaries change to either the positive or a negative. However, if it remains the same it does not mean that the income is the same as the previous year. Rather, it reflects a change in the income, which is directly affected by the economy. The Nominal GDP for the current and the base year.

When the government introduces the investment tax credit, a number of systems in the state will experience an increased taxation inflow. Therefore, the public, who are a significant contributor to the tax process, are forced to pay higher returns. According to the loanable funds model, a high return is a result of the slope of the supply curve(Mankiw, 2014). Therefore, as the tax rates are kept constant, the government fails to save and with poor investments since there is no generation of income. On the other hand, these implications come with increased interest rates for the government.

When the consumers save, it implies that there is a little supply rate in the markets. As a result, the government operates with small loans given to the public. Similarly, the government loses the quantity loaned out, and the interest rate for the government reduces. The investment, however, of the government is small with the reduced number of loans offered and the interest accrued.

The discovery of natural energy increases the number of citizens who invest in the mining and the subsequent processes. Similarly, the government realizes an increase in savings and the investments, which are done mostly by the citizens. On the other hand, interest rates of the government through the loans increase. The value added of a firm increases its publicity among the customers and portends the success of the product in its release to the market. When the customers are knowledgeable of the product, they intend to purchase, their anticipation increases the likelihood of purchasing the product. However, the positive results only are realized if the product provides the customers with the need not addressed in the market.

An economic system gives allowance for changes in the workplace about the labor force, the efficiency of an employee, the wages, and the skills of the employee. Therefore, an employee can change his or her position from time to time and, at the same time, another employee may lose his or her job to another employee. Therefore, frictional unemployment continues to exist. On the other hand, demand in the market directly affects the changes in the workplace, which translates to the increased rate of unemployment or hiring. The market demand leads to the development of the new system in an organization, which promotes structural unemployment.

In the management of frictional and structural unemployment, the government has the mandate of providing information to the employees on the job opportunities and skills that are in demand. Knowledge on what is lacking in the market helps reduce the number of employees fired since they do not meet the requirements of the job. On the other hand, the administrators should increase the manual skills job opportunities and invest more in the agricultural sector, which is the leading employment sector. Through the increased manual labor for the employee, fewer instances are realized when employees lose their job.

An economic problem or challenge occurs when a country fails to meet the needs or wants of its population with the scarce resources it has. It could be said that when an economy fails to meets its micro and macro-economic goals it creates an economic problem for them. Since 2007 the world has seen a setback economically and even the most stable countries have faced challenges in their economy. While developing countries are spending more on rectifying issues with poverty and inflation developed countries are now stressing more on climate sustainability. As stated before economics is divided into two fields; macro and micro, therefore the problems that lie are also different.

Microeconomics deals with how scarce resources should be used by the government and how the policies that the government makes focusing on those production actions. The problems are the questions of production which involve how much must be produced, how to produce and for whom to produce. The matters of competitive market and monopoly and also the government tax burdens that are levied on the companies. It focuses on how to maximize income while keeping individual productivity intact. Microeconomics focuses on the individual aspects or agents of the economy like households, labor, companies that conduct business, and inequality of wealth.

Macroeconomics, on the other hand, focuses on the bigger picture, focuses on the economy as a whole. The problems that are highlighted in macroeconomics are broader issues such as unemployment, inflation, debt, interest rates, and stagnant economic growth. It highlights the functions of a larger economic system.

While both macro and microeconomic problems are of importance but when talking about a countries healthy economic system the indicators are mostly driven from macro-economic factors. To assess whether a countries economic condition is stable or not it is important to note major economic goals such as standard of living, unemployment rate, and inflation rate.

When we talk about economic challenges that a country faces its most likely problem they are facing in accomplishing their macro-economic goals. Unemployment, income inequality, growing globalization, debt imbalance, lack of proper health and education, and climate changes are all considered as global economic challenges.

Australian economy specifically enjoyed success in the past decades with a considerably high gross domestic product, ranks favorably in wellbeing and has not seen a major recession in the past two decades. However recently the Australian economy is at risk of falling in a low growth trap, and many surveys have shown that there are many underlying economic problems in Australia. This essay will focus on the 3 biggest economic challenges present in Australia and what should be done to rectify them.

Australia’s economy is one of the most developed countries however recently the country has seemed to enter a phase of no growth. Wages are not increasing instead are stagnant, unemployment is increasing by the day, housing prices are falling it feels as if the economy is tanking and if not that it is moving towards it with its no-growth phase.

The three biggest economic problems that underlie in the Australian economy are unemployment, household debt, and slow economic growth.

During 2018 the government has been applauding itself for creating over 330.000 jobs, which is good news for most countries however it is not the case for Australia. The real picture is that where the jobs have increased the rate of unemployment has increased by a higher percentage. The numbers show that 330,000 jobs were added but what is not shown is that and addition of 350,000 workers were also added to the workforce. This scenario shows that although new jobs were added, the number of workers exceeded the number of jobs and hence worsening the situation of unemployment.

The current rate of unemployment is 5.6 percent, which has increased from a previous 5 percent in October 2018. The treasury and reserve bank of Australia both believe that the lowest it can go down to is 5.25 percent t without having inflation or wage breakout, which means that if unemployment is to be put reduced other problems, may occur. It is alarming to see that Australia being one of the most developed countries and standing among progressive countries like the USA, Japan, China, and Germany who have a matter of unemployment under control.

· The USA has an unemployment rate of 4.3%

· Japan has an unemployment rate of 2.8%

· The UK has an unemployment rate of 4.5%

· Germany has an unemployment rate of 3.9%

There are many factors why a country might be facing issues with increasing unemployment which include

· Frictional unemployment: this means that temporary unemployment has been created while people are switching jobs. So this is transitional unemployment.

· Structural unemployment: this is a type of long-term unemployment, it may occur due to a long-term reduction in the demand, globalization or competitive advantage.

· Cyclic unemployment: this is demand deficit unemployment; an economy does not have to go in recession to face such type of unemployment, it can occur on if the process of production is slowed down.

According to sources, it is an event that Australia is facing hiked numbers of unemployment due to lone run structural factors. Lack of trained and skilled labor has caused the number of unemployed workers to increase because the current force looking for jobs does not have the skill set required for the Australian economy.

Another reason for ever-increasing unemployment rates is the fact that people are preferring immigrants from different countries that have the requisite skillset and are arriving through the 457 visa programs over unemployed Australians.

Knowing the benefits that training and education can bring to Australia’s workforce the government has still imposed cuts on trade training, underfunding schools and increasing the university fees making it unaffordable for many students

The problem of unemployment can be rectified through either fiscal or monetary policy. In my opinion, fiscal policy would be the best possible solution since monetary policy looks a little risk because of the fluctuations in interest rates caused by household debt.

Fiscal policy can stimulate the economy and lower the rate of unemployment, by cutting back on taxes and increasing government spending. Increase in government spending will increase the aggregate demand of the economy, lower taxes would increase the disposable income and also increase the aggregate demand for goods. If the demand for goods increases, then the demand for workers will also increase which is why the unemployment rations will also decrease. This is called an expansionary fiscal policy.

Another way this fiscal policy can decrease the rate of unemployment is if the government spends on the right kind of training for unskilled workers and properly fund the schools that were previously underfunded.

After 28 years of expansion, stable growth rate, inflation, and increasing GDP the country is seeing a time where it might step into recession. The GDP this year has been $1.3 trillion the economy grew by 0.4% in the last three months which is double the amount that was in march but is still less than the estimated 0.5%.

The growth rate of 1.8% is far less than the 3.5% that is a long term average, the expansion rate has been this low since the great financial crisis. According to CommSec chief economist Craig James ‘The Aussie economy has lost momentum. And soft consumer spending is the main culprit,”

According to the forecast of IMF the economic growth, Australia will slow down by twice the speed as compared to other developed nations. The forecast also states that the highest GDP can go this year in 2019 is 2.1 which will be 0.7% less than in 2018.

The issue here is that although the economic growth is less than last year but is still a positive number, which may be a good situation for any other developing country, it is not the case with Australia. The issue with Australia is that the population is increasing too hence making the GDP per capita very low. According to the Australian Bureau of statistics, the GDP per capita has also fallen by 0.03%

Australia is going backward for the very first time, which has been happened in the past 2 decades. The main reason for slow growth can be that it heavily relied on natural resources as its main source of production, mining for coal and minerals was the main occupation of Australia and it earned most of its revenue from exporting it. Natural resources are finite and bound to replenish and that can become a problem for an economy who is heavily reliant on such sources.

Another common notion is that the more immigrants in a country the more its growth would be, the GDP growth of Australia was powered by immigrants and they also contributed to 50% of the population growth. The growth in population tends to depress the GDP per capita, so immigrants that was once the reason behind Australia’s economic growth is now threatening it.

To increase the economic growth of Australia it is feasible that expansionary monetary policy is stimulated so that aggregate demand increases which would lead a demand-led growth. Cutting on interest rates and increasing the amount of income available to people so that they spend and the GDP would increase.

The lower interest rate would also act as an agent in reducing exchange rates and hence making exports more competitive. Lowering interest rates would also mean that people face relaxation on payment of their debts and can now have more disposable income. This year recently the central bank of Australia has taken this first step by reducing the interest to a record low of 1.25%.

Another alarming situation for the Australian economy is the Household debt to income ratio is more than 200% and the ratio of the household debt to the local economy is 125%. Compare to other developed countries like Canada, Britain, and the USA who has a ratio lying between 80 to 100% is shockingly high. It is considered a big challenge to the Australian government because middle-class income earners owe most of the household debt. People like lawyers, doctors, accountants, and engineers owe these household debts and they are the backbone of the economy. If this income group faces any distress it would reflect on the economy and its growth. Are middle-income groups facing economic problems, they would cut back on their spending hence consumer spending would reduce. If debt increases the consumer spending decreases and so does economic health.

International Monetary Fund (IMF) is also highly concerned about the matter since Australian has been heavily relying upon household debt to drive the economy. Since the Federal Reserve is going to raise interest rates it is going to bring the Gross Domestic Product (GDP) down. The effects are starting to kick in since 2017 where a lot of loans that were viable once are not now and housing prices are going down. Australia ranks 4th highest household debt to income ratio in the world. If the household debt would be high the saving and consumer-spending ration would be low and therefore it would put pressure on the economy.

It is also important to realize that if the debt to income ratio is high this can at some point also lead to mortgage loan default. Because of this action, the banks undergo a severe financial loss and a contraction in lending occurs. Less lending will then lead to will in turn decrease business investment putting the Australian economy in reverse gear.

The sensible solution to this would be to stimulate an expansionary monetary policy where the interest rates are reduced so that the debt could be paid off easily without the burden and also the chances default reduce.

Australia has enjoyed a stable economy for nearly 28 years however the issue of unemployment has always been of concern to the economy. They were able to overshadow it by the immensely growing economy and equal distribution of wealth. However, Australia has now entered a phase of stagnant growth and the issue of unemployment and household debt has become unavoidable now more than ever. The rate of economic growth is a record low and slight fever of inflation can be seen. The government should apply the above-mentioned policies to make sure that these issues are corrected at the right time before the economy enters into a recession.

Recession means when the economy of a country falls, and some undesirable situations also occurred due to recession. These causes down fall in employment rate, fall in wages rate, and fall in retail price. Recession may be occurred for two months four months but not more than one year. If it does then these are the not good sign for that country and for global economy also. In 2007 global financial crises occurred this also a recession. It started from USA and effects every developing country. India is also one of them and it effected the India also. The reason behind this is “structured investment instruments (Collateralized Debt Obligations, synthetic CDOs) created out of sub-prime mortgage lending in the United States. ” (Economic Discussion, n. d. ) In India flow of foreign currency and FII foreign institutional investors declined to US$ 22. 5 billon to US$ 11. 8 billion for four months of 2007 and 2008. During this period Indian GDP drops as in 2006-07 the GDP growth rate was 9. 6% which became 9. 3% in 2007-08 and due to the impact of recent global financial crisis and global recession, the growth rate of Indian economy became declining. In 2008-09, it reduced to 6. 8%.

During recession industrial growth was also faltering. Indian economy worked well from 90s but due to this it damaged the back bone of Indian economy. The RBI narrowed its money policies. Due to this recession MI was dropped from 19. 4 to 8. 2 and M3 from from 21 to 18. 7. Due to this recession series of unconventional measures helped to push up the rate of growth of bank credit from 25. 4 per cent in August 2008 to 26. 9 per cent in November 2008. In this period of recession Indian companies in USA loss their potential income and long and short-term credit. Despite these developments, the macroeconomic impact of the global financial turmoil, particularly on the GDP growth, has been relatively muted due to the overall strength of domestic demand in India and the predominantly domestic nature of investment financing. During recession period every general use good also peaking up its prices. As we all know, India is an agriculture familiar country and recession hit agriculture sector very badly no one buy agriculture goods in bulk because everyone was not sure about recession’s result. Indian banks also faced crises and lose about US$3. 6 trillion. But on the other hand, “India’s largest private sector lender ICICI Bank Ltd had the maximum exposure to Lehman Brothers—$83 million, less than 0. 1% of the bank’s consolidated balance sheet. Others like State Bank of India, Bank of India, Bank of Baroda, Punjab National Bank and Axis Bank Ltd had very small exposure to Lehman Brothers, which also ran a non-banking financial company in India, but its entire Rs. 800 crore capital was invested in government securities and bank deposits”. (livemint, 2013)

On the other hand, the benefit of this recession was seen in Indian manufacturing market. Before this Indian manufacturing market is slow and not more consist in exports but after this Indian government believed in their manufacturing power and their potential to earn more foreign money. This influenced the Indian economy and now the result is positive, and India sell most of their home goods and use them also. Recent Indian government also helps the public to take “Made in India” initiative. Three puzzling things of article· How Indian private banks do well in recessionBecause Indian banks on recession invested in private sector and most the private sectors were not connected to government and high interest on loans at recession helped them.

On May 26, 2015, Bernie Sanders, one of the runner ups for presidential candidacy, holds his “kickoff” event in his hometown Burlington,Vermont. On that day, Sanders discusses the overall being of the American people and the economic problem that hovers over the nation today. The problem is the economic inequality among social classes in America, in which is making the middle class of this country disappear and shrink for the last forty years. In his attempt to run for presidential candidacy, Bernie Sanders values the actions of everyday Americans in order to shift the attention towards the economic and social problem in the United States in order to overall benefit the well being of the nation.

At the beginning of the speech, Sanders strives to achieve the support and participation of the audience to establish the building blocks of his presidential campaign by controlling his tone and mood of the audience. When he begins his speech, Sanders repeats “today” and “time” to his audience. Although both words connote a sense of presence and urgency, Sanders also declares in reference to the nation’s economic and social development that there is “no time” to either “[think] small” or have the “same old ideas,” but “the time” for families to unite. When he asks for unity among families, Sanders portrays the economic problem to be more critical and urgent than any other in American history. He must seize the attention of his audience, and address the problem to create pressure for a new economic solution. The pressure provokes people to support Sanders and participate in the fight for ‘economic and social justice.’ As Sanders calls for the working families to come together, he employs patriotism for a sense of national pride that the United States is the leader in “the fight for justice.” The patriotism motivates the audience to vitally participate in the “fight” that makes the United States best known for qualities like “health, prosperity, security and joy” that separate the United States from other nations. All in all, Sanders tries to obtain the support of his audience in order to develop the premise of his campaign with a critical yet urgent tone and a sense of national pride.

In the middle of the speech, Sanders personally sacrifices his campaign to acknowledge the needs, individuality and power of the American people to support him and economic revolution. When Sanders clarifies who the campaign is for, he personally sacrifices his candidacy for “the needs of the American people” and the “ideas and proposals” that address those needs. Sanders’ personal sacrifice causes the American people to actively support Sanders, and encourage economic revolution through the power and value of each American to act against the ideals on economic inequality and wealth. After addressing who the campaign is for, Sanders repeats his “hope” of desperation and willingness to reform American economy. The repetition notifies the audience of Sanders’ interest of supporting the working class, predisposing the people to trust his campaign in restoring American economy and society. Sanders includes repetition in his speech to have larger members of society like the media realize the needs of the American people by acknowledging their decisions and actions. In conclusion Sanders’ sacrificial campaign values the American people’s needs, individuality and power that results in his support and economic reformation.

At the end of the speech, Sanders rallies the audience by sharing his experiences to collaboratively fight alongside him for a nation that benefits the working class. As Sanders shares his background to his audience, he includes a sense of patriotism when he “have seen the promise of America.” The patriotism stirs the audience’s national pride in an effort to restore the economy, motivating the audience to fulfill the ‘promise’ to discourage economic inequality among the different social classes. The previous use of patriotism discusses at an international level while this use of patriotism narrows the discussion to further support economic and social development within the United States. After Sanders finish his background, the anecdote shares a “lesson” that nothing cannot be accomplished if “people stand together and prepare.” The anecdote demonstrates Sanders’ experience with his ‘lesson’ about collaboration and achievement which motivates the American people to collaborate in order to build a future that works for everyone, not only the rich. Sanders includes an anecdote to make himself relatable to his audience; that he also experiences the same ideals about collaboration to gain support due to his experiences. To sum up, Sanders’ anecdotes inspires the audience to collaboratively participate in his campaign to benefit the American people.

In his run for presidential candidacy, Bernie Sanders values the decisions and actions of everyday Americans in order to shift the attention toward the economic and social revolution in the United States. Throughout his speech, Sanders interacts with his audience by valuing, supporting, and working with them in order to gain the support that results in an economic and social reform. Overall Sanders’ technique to gain the support for his presidential candidacy is to hand down collaboration and responsibility to the audience in order to resolve the economic and social problem of wealth inequality.

Economy is a region of the creation, dispersion, or exchanging, and utilization of products and enterprises by various specialists. Comprehended in its broadest sense, ‘The economy is characterized as a social space that stresses the practices, talks, and material articulations related with the generation, utilize, and administration of resources. Economic operators can be people, organizations, associations, or governments. Monetary exchanges happen when two gatherings consent to the esteem or cost of the executed great or administration, generally communicated in specific cash. In any case, money related exchanges represent a little piece of the monetary space. Moreover, the real GDP which is gross domestic product is one the best ways to determine an economy. It is a region of the creation, dispersion, or trade, and utilization of products and enterprises by various specialists. Comprehended in its broadest sense, ‘The economy is characterized as a social space that stresses the practices, talks, and material articulations related with the generation, utilize, and administration of resources. Economic operators can be people, organizations, associations, or governments. Monetary exchanges happen when two gatherings consent to the esteem or cost of the executed great or administration, generally communicated in specific cash. In any case, money related exchanges represent a little piece of the monetary space.

Turkey is among the world’s produced nations as indicated by the CIA World Factbook. Turkey is likewise characterized by financial specialists and political researchers as one of the world’s recently industrialized nations. Turkey has the world’s seventeenth biggest ostensible GDP, and thirteenth biggest GDP. The nation is among the world’s driving makers of agricultural items, materials, engine vehicles, ships and other transportation equipment and home machines. Therefore, Turkey’s GDP is 17th on the whole world in 2017. According to trading economy said that turkey has been increased its GDP from 2004 until 2013. In 2014, Turkey reached the heights GDP which is 950 billion, so we can say that Turkey worked vey hard to develop and improve its GDP. Then, GDP decreased from 2014 until 2017, so we will describe why this happened and how to solve this issue. This graph below shows the data of the GDP is going on from 2008 to 2017.

There are some important steps or points that Turkey follow to improve its economy and GDP to improve. First, increment in national income throw capital development, rise proceeding, and the growth of the generation stations by foundation new projects, particularly industry. For example, turkey has been increasing in industry and it exports these industries to whole world. Second, ascent in the stander of living of populace toss expanded yield of purchaser merchandise, changes in arrive residency, redistribution of national pay by monetary and social arrangement and change in security and instruction condition. Third, enhancements to be determined of exchange and installment. at last, development of the financial freedom of the nation. Consequently, Turkey focuses on the industry, agricultures, tourism, and education. If people come or travel to Turkey, they can see that there is a lot of tourist and company to investment, so all these help Turkey to improve and develop its GDP and economy. However, there are some of issues that made its GDP to decrease in last five years.

Turkey has been facing some problems or issues. One of these issues is inflation, and it caused to drop consumption, so the GDP of Turkey will decrease. Turkish buyers or consumers value expansion rose to 15.39 percent year-on-year in June 2018 from 12.15 percent in the earlier month. The expansion came in path over the national bank’s objective of 5 percent and hit the most elevated amount since January 2004 on the back of industrious money shortcoming (Trading Economic). According to the statistic below, we can publish that Turkish purchaser value inflammation rose to 15.39 percent year-on-year in June 2018 from 12.15 percent in the earlier month. The expansion came in route over the national bank’s objective of 5 percent and hit the most elevated amount since January 2004 on the back of tenacious money shortcoming.

Turkey has stellar economic progress. However, the problem is that it has been driven by fast credit development, including to the weight the nation’s present record deficiency the contrast between the estimation of merchandise and enterprises it imports and those it sends out. After a downturn following an endeavored upset in 2016, the economy is currently tearing along at more than 11 percent year-on-year – its speediest extension in six years. Moreover, management of government has issue with balance problem. Unlike to other rising economies, Turkey has not figured out how to get it together on its enormous current record shortage. Trading Economic supported that recorded shortage flowed to $7.1 billion in January from $2.7 billion multiyear earlier. As Turkey depends vigorously on outside financing to plug the hole, speculators have voiced worry about the kind of inflows, indicating a decrease in “stickier” financing, for example, long haul advances and remote direct venture. As a result, all these main issue or problem that Turkey government has been facing, but Turkey is trying very hard to correct these situations to improve its economy again like in 2014.

In Turkey, there has been a substantial increment in the dynamic working populace, however an extremely humble ascent in the interest for work. Therefore, labor force investment rates have continually diminished amid the most recent decades and work in the casual part has developed. Issues, for example, underemployment, an inadequate youthful populace and the development of the casual segment absolutely exist, however their answer appears far off because of interior and outside financial conditions. Despite the fact that more dynamic work approaches are earnestly required in the nation, they are left off the motivation. Be that as it may, sensible arrangements must be accomplished in Turkey, and without a doubt around the world, by radical changes in monetary and social understanding which may realize worldwide justification.

To solve these problems and issues, we need to follow some steps and points. First, we need to fix inflation issue by monetary policy, fiscal policy and supply policy. For monetary policy, we should expand loan fees increment the cost of acquiring, disheartening customers from obtaining and spending, so it expands loan costs make it more alluring to spare cash. Increased financing costs reduce the discretionary cashflow of those with contracts, and higher financing costs extended the estimation of the exchange scale instigation lower prices and more imports. For fiscal policy, this is another request side strategy, comparable in actuality to financial arrangement. Monetary arrangement includes the administration changing expense and spending levels keeping in mind the end goal to impact the level of Aggregate Demand. To decrease inflationary weights the legislature can expand assess and diminish government spending. Moreover, supply side policies purpose to increase long term competitiveness and productivity. For example, it was hoped that privatization and deregulation would make firms more productive and competitive. Therefore, in the long run, supply side policies can help reduce inflationary pressures. However, supply side policies work very much in the long term; they cannot be used to reduce sudden increases in the inflation rate. Also, there is no guarantee government supply side policies will be successful in reducing inflation.

For unemployment, Turkey needs to return to basic changes, and it likewise need to see more good examples picking to take their risks as business visionaries, in spite of the extreme conditions. It also needs to open new private sectors in order to provide new spaces for labors. As we know, Turkey is one of the most touring countries in the world, so it can open new touring places that occupy many labors to work in.

Poverty is a situation wherein human beings aren’t able to afford basic needs. Its definition is short and sweet, but its implications are vast and complex. President Kennedy’s inaugural remarks remind us that “The challenge of global poverty is not new.” Historically, poverty has been an epidemic, killing thousands of people year after year. Over the past several decades, however, there have been very impressive improvements in some parts of the developing world. The United States has witnessed a flourishing of new activists, who provide a compelling example that poverty-reduction goals transcend national borders and political divides. For the people of America, their conscience and faith demand that they tackle this pressing issue because it is the right thing to do. The American people feel pride by helping the poor gain access to quality education, and plenty of opportunities to grow. The intervention of the United States in the global project to reduce poverty is crucial, as it is one of the most influential agenda-setters and has one of the biggest economic and military forces. There are several ways the U.S. is already tackling the issue, such as investing $500 billion in developing countries. This effort to increase economic output in developing nations helps people to improve their living standards. Furthermore, In June 2015, The United States passed the Trade Preferences Extension Act of 2015 (TPEA) to renew some of the preference programs. These preference programs have largely contributed to the reduction of poverty, by alleviating hunger in a large number of developing countries. Since the preference act was first implemented, poverty has fallen drastically worldwide, especially in the last couple of decades, with rates of undernourishment dropping as well. The World Bank estimates that the total number of people living in absolute poverty has fallen from 1.96 billion people in 1991 to 702 million people in 2015. Global rates of absolute poverty have fallen at an even faster rate, from 37 percent in 1991 to 9.6 percent in 2015.

Poverty is a situation wherein human beings aren’t able to afford basic needs. Its definition is short and sweet, but its implications are vast and complex. President Kennedy’s inaugural remarks remind us that “The challenge of global poverty is not new.” Historically, poverty has been an epidemic, killing thousands of people year after year. Over the past several decades, however, there have been very impressive improvements in some parts of the developing world. The United States has witnessed a flourishing of new activists, who provide a compelling example that poverty-reduction goals transcend national borders and political divides.

For the people of America, their conscience and faith demand that they tackle this pressing issue because it is the right thing to do. The American people feel pride by helping the poor gain access to quality education, and plenty of opportunities to grow. The intervention of the United States in the global project to reduce poverty is crucial, as it is one of the most influential agenda-setters and has one of the biggest economic and military forces. There are several ways the U.S. is already tackling the issue, such as investing $500 billion in developing countries. This effort to increase economic output in developing nations helps people to improve their living standards. Furthermore, In June 2015, The United States passed the Trade Preferences Extension Act of 2015 (TPEA) to renew some of the preference programs. These preference programs have largely contributed to the reduction of poverty, by alleviating hunger in a large number of developing countries. Since the preference act was first implemented, poverty has fallen drastically worldwide, especially in the last couple of decades, with rates of undernourishment dropping as well. The World Bank estimates that the total number of people living in absolute poverty has fallen from 1.96 billion people in 1991 to 702 million people in 2015. Global rates of absolute poverty have fallen at an even faster rate, from 37 percent in 1991 to 9.6 percent in 2015. During the same period, according to estimates by the UN Food and Agricultural Organization, the global rate of undernourishment has fallen from 18.6 percent to 10.9 percent of world population.

But as one of the most advanced agenda-setters and biggest economic and military forces, The United States is obliged to do much more. The goal is for developing nations to be able to rely on The United States during times of poverty and economic crisis. This can be achieved by passing Bills like the Electrify Africa Act and the Global Food Security Act. This bill would help provide electricity to 50 million people in Africa, along with better security, health care and housing for families in need. This is a very vital step in pursuit of ending global poverty and inequality. Luckily, the Electrify Africa Act has already largely been successful on the floor of the House of Representatives and was passed with overwhelming bipartisan support. It Now moves on to the Senate, where it has already been read and referred to the Committee on Foreign Relations.

The U.S. ranks 19th in the world in terms of Foreign aid provision. However, only 1.5 percent of the federal budget goes toward international affairs. In order to effectively and permanently end global poverty, the U.S. is starting to increase their foreign aid supply, predominantly by increasing the budget of the U.S. Agency on International Development (USAID), which overlooks all international humanitarian efforts the United States is involved in. The words of President Barack Obama are indispensable, who says that “Foreign Assistance is not an end in itself. The purpose of aid must be to create the conditions where it is no longer needed.” Therefore, the primary purpose of this Financial aid is to assist developing nations, and not to increase their dependence on the Foreign aid. Additionally, in the past few decades, USAID, which is the U.S. powerhouse for international assistance projects, has worked closely with UNICEF and other international aid organizations on many programs that tackle with issues like poor nutrition in African countries and social development in Nigeria. A stronger alliance between The U.S. and international organizations through the USAID allows the U.S. to have a greater role in reducing poverty in developing nations.

As President Franklin D. Roosevelt rightly said, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” By continuing to provide aid developing nations, whilst making them independent, the United States can help make poverty history.

“What is poverty?” by Jo Goodwin Parker may be a denotative interpretation of poverty. UN agency the poor area unit and the way the society’s stereotype is injustice. Parker with success describes the poor people’s issues and also the purpose of read that society has for those who sleep in poorness. Apparently, in Seventies the socio-economic condition people was awful and also the indisputable fact that Parker wrote the essay in 1971 may be altogether relatable to the socio-economic conditions people at that point. There was the increase of poorness, inflation, state and energy shortage throughout the 70s that turned the socio-economic condition people into a terrible mess.

During the 70s, the war had simply ended and also the U.S. Economy was symptom. The golden age is over and also the U.S. Entered a recession. Several issues were commencing to pop and it absolutely was overwhelming the yank individuals. The energy shortage occurred owing to a worldwide oil shortage. Nations round the world began to conserve their non-renewable oil provides in hopes to own some still out there within the close to future. Nations began to rely upon the center East for oil owing to their sheer abundance of it. Throughout this oil shortage, the Arab and Israel states had a war known as the Day of Atonement War. The Arabs would lose as a result of the west had helped out the Israelis. Thanks to this, out of frustration, the Arabs place and oil embargo on the west known as the ‘Arab Oil Embargo.’ Of the participants were the globe were the most important oil producers like Asian country, Iraq, and Kuwait. The gas costs would sky rocket, quadruple even. This ravaged the western economy as well as the Americans economy. This could result in solid ground having rising prices. Rising prices may be a portmanteau wont to describe a amount with a high rate of inflation combined with AN economic recession. This could bring the U.S. Gas costs to travel from thirty five cents a gallon within the starting of 1970 to around ninety cents close to the tip of the 70s. The embargo would finish but a year later in March of 1974 however the results would keep until the tip of the century.

The inflation of the Seventies was terrible. There was a combination of a high demand and a coffee offer of things like jobs, houses, cars etc. The explanation for this high inflation was as a result of nobody wished to require workplace because the central bank chairman. Conjointly many folks beneath calculable the results of the inflation issues. Nobody very had a mandate to prevent the inflation either. Thus what happened was that the costs unbroken on rising and rising. Another factor that caused inflation was that the investors and creditors had no confidence within the bank system. The dearth of believability and commitment cause inflation to rise. The 3 main reasons toward inflation area unit as follows.

1. The u. s. had a burst of inflation within the Seventies as a result of till the Eighties no powerful policy manufacturers till Paul Volcker became Chairman of the central bank UN agency placed a sufficiently high priority on stopping inflation.
2. The policies of the Nineteen Sixties left policy manufacturers of the Seventies with painful dilemmas. They were ‘Dealt with unhealthy cards’ These ‘bad cards’ mixed with unhealthy luck diode to high inflation.
3. The last cause was that the good depression created it arduous to believe that the trade cycle was a fluctuation around instead of a shortage below potential output and potential employment.

Another reason for the poor economy was the high state. The high state was a results of the ladies men and a mix of returning troopers from Vietnam. In 1869 the utilization was around eighty million staff. By the tip of the 70s, it absolutely was over ninety six million staff. This was a rise of over sixteen million additional staff. It went from three p.c state to around eight p.c state, nearly reaching another depression. The economy of the seventies was terrible. Dubbed with AN oil embargo ANd a combination of different issues diode the yank nation to an virtually depression state. The energy shortage was the beginning followed by high state and inflation. The economy of the United States throughout the seventies was a tough time for everyone in America. It wasn’t sensible and it simply got worse and worse till the 80s.

It is true that such poorness like delineate in Parker’s essay did exist. The autumn within the socio-economic condition people was the explanation behind the poorness and plenty of different issues in Seventies. The center and socio-economic class communities had been suffering from this rising rate of poorness over the social class community. It absolutely was the dark time for America that diode the country into despair and misery.

According to the Syrian Network for Human Rights 206,923 civilians have been killed during the span of Syria’s civil war. It is estimated by the SNHR that 57% of these deaths are due to aerial bombardment. Those that are lucky enough to live through the air raids experience many after-effects, the largest one being P.T.S.D. If they so happen to be injured during the bombings they would be forced to try and make it to one of few makeshift hospitals located around Syria. During all of this there have been countries who refuse to take in any refugees. If these nations were to openly accept Syrian civilians trying to escape death we would almost immediately see a decline in the death toll.

Airstrikes are a common form of death when living in Syria. There is believed to be a total of 8,052 airstrikes on Syrian soil in which airwars says it is going up daily. Airwars also states that with these 8,000+ airstrikes there have also been a total of 76,649 bombs and missiles dropped. An airstrikes is considered any form of attack that requires the use of an aircraft. Before an airstrikes launches there are steps that must be thought through before any advancements. Sharon Weinberger explains that there are six steps the U.S. and other coalition countries use before initiating these strikes.

Step one is “Objectives, Effects, and Guidance” (Weinberger, “How it Works: A U.S. Military Airstrike”). According to Sharon these are actually three separate steps, but all equivalent in a linked area. Many people believe that an airstrike is as simple as picking a target and destroying it, but that is not the case. There are planners that determine what goals these strikes are looking to achieve. Once these goals are found they must determine how to proceed to have the effect they want. Weinberger says that step two is “Target Development” this is when a group of people create a list of targets using reports from outside sources in order to find out the potential for any collateral or innocent civilians that may be killed or injured. For the past several months airstrikes from coalition and Russia have been ignoring this step, taking numerous lives in the process.

Sharon named step three “Weaponeering and Allocation”. This is where another team of analysts review the amount of weaponry needed to get the job done. The bigger the job the larger the weapons, smaller jobs need less weapons. This will devise the “perfect” plan for airstrikes. Step four is explained by Sharon as “Air Tasking Order Production and Dissemination”. Simply put this is just the submission of all instructions from prior steps sent to current allies in the area. The previous step is just a preliminary in order to make way for step five and six, Sharon has named them “Execution Planning and Assessment”. Execution planning is just the pilot taking off and completing the mission that he was assigned. Assessment is just created to see if they accomplished what they set out to achieve. These are the steps to a successful airstrike, sadly a few of them have been overlooked every so often.

There are many countries that bring in Syrian refugees and others that avoid harboring any due to the economic problems that may occur. Those that are refusing to help these innocent civilians are in turn letting them die. If countries were to bring in a few more Syrian citizens we would have a lot less death on our hands as opposed to what is currently happening. When there are less innocents in Syria there are less lives to put at risk during airstrikes. The main targets of many of the coalition strikes have been terrorist organizations like The K.G.B or I.S.I.S. problem with this being that many of the cities that these organizations are found in contain many civilians stuck between a rock and a hard place. The proposal of having countries take in a few civilians will make it easier for these airstrikes to continue, with a lower chance of civilian casualties we can see a higher amount of coalition bombs with less devastating consequences. Some places like Germany have 300,000 refugees, but other places like the U.S. will only take 10,000, even then some states won’t allow any in (Jon Stone, “Syrian refugee crisis: How different countries have responded”).

If we were to increase the amount of refugees per country most of the Syrian problems would be minimized. With a lack of civilians roaming many of the terrorist infiltrated cities there will be less worry. Airstrikes will be more effective as there will be less in the way of taking down the actual target. The death toll of Syria would decrease as there aren’t people to kill between these strikes, the government, and terrorists meaning that more lives will be saved. Daily the people of Syria live in fear as they are unsure of whether or not it will be their last day on Earth, no one should have to live with that type of fear.

According to the Cambridge English Dictionary, scarcity is the lack of certain resources, making it hard to achieve. In the context of economics, the lack of resources leads to the inability to meet the demands of the market. The reason scarcity exists in the first place is due to the consumption of the resource itself. The usage of the resources eventually leads to a shortage of resources. The higher the consumption, the faster the supply runs out, causing demand-induced scarcity.

Scarcity of water due to the increase of water consumption by 40% and the lack of water to satisfy the needs of people.

Scarcity of food. This happens because food consumption is expected to increase by 35%, but because food is a limited resource and there is not enough food to satisfy all the constantly increasing population’s demands.

The scarcity of energy is the lack of electricity to support the expanding network infrastructure of the growing population. In an age where technology is present in daily life, electricity becomes a vital source of energy in order to uphold a nation to a standard of living.

Describe the nature of the basic economic problem through the perspective of the growing middle class. [5 marks]

The basic economic problem exists because, although the needs and wants of people are endless, the resources available to satisfy needs and wants are limited. This problem gets major part due to the growing population of the middle class, as the increased number of people leads to an increased number of needs and wants, thus making the limited resources deplete at a faster rate.

The economic problem occurs when the demand for resources grows. Free-trade pacts, pro-open markets, pro-trade policies, and less global conflict are all vital principles that have led to a massive spike in economic growth, resulting in one of the fastest migrations out of poverty the world has ever seen. 5.3 billion people are expected to be part of the global middle class, which means 2 billion more new entrants. This number will be rising throughout the years as the population of developing countries is growing at a constant rate. The rapid increase in the number of adolescents means that the increasing demand cannot be met using the limited resources available, leading to scarcity. For example, over the course of 11 years: food consumption is expected to increase by 35%, water by 40%, and energy by 50%.

Therefore, the basic economic problem refers to the problem of economizing scarce resources or making the best use of those limited resources to satisfy the needs and wants of the increasing population.

First of all, before talking about the economic problem and what follows it will be better to start with what is the economy as such. So, economics is a term we hear everywhere and is present in all human societies. It is a discipline that studies the description and also analyzes the production, the exchanges, and the consumption of the goods and services of a society. It simply means that economics is a science that analyzes and describes how people living in society provide themselves with what they need in order to survive. Since the dawn of time, we know that different human societies are made up of people having the same custom, culture, and almost similar behaviors and are also constituted of different social classes. All human societies are distinguished from each other according to their geographical location and also their history. Among these societies, however, are the rich and the poor. From where emerges the universal problem which is the economic problem. This is a hidden reality that all human societies have in common.

The economic problem according to Heilbroner is “the way we manage the unlimited needs of all members of society by providing them with material welfare, with limited resources available” (Robert L Heilbroner, 2011). He argues that individuals in poor nations (underdeveloped countries) have some economic independence although they are in poverty. This is because individuals in poor nations are self-sufficient and provide the necessities for their own survival. Individuals living in poor nations are self-reliant because they do everything themselves, they do not depend on another person to do the work for them and their survival depends on their own ability. These individuals are born, raised, and have lived all their lives in that environment so they are used to this mode of life and they don’t have any problem to continue living so. On the other hand, individuals from wealthy nations, lack independence in the sense that they rely on other people for their survival. These individuals use people who have certain skills to do the work that they cannot do themselves. So, with this separation of labor, and the dependence of the individuals of the rich nations on others, there is an advantage for the individuals of the rich nations but if the people doing their work in their place can no longer be able to do it. Individuals from wealthy nations will be clueless because they are just not prepared to do this kind of work and they do know not how to do it.

Therefore, by economic problem, we mean the way in which society distributes materials and resolve them through production and distribution. In terms of production and distribution, these are the two main tasks found in any society. The first task, which is production, consists in guaranteeing a sufficient production of goods and services for one’s personal survival, and the second, which is distribution, consists in distributing the results of its production to generate even more production. However, it is difficult for societies to fulfill these two tasks, firstly to the unlimited need of individuals and secondly for the limited amount of available resources. The society also faces production and distribution difficulties due to a lack of good remuneration to push workers to do a good job or sometimes due to the fact that production is not fully distributed. So, they have to find people to do the job effectively and make sure that people produce the goods and services that society needs. We note then that these two distinct tasks are closely related. To ensure the continuous supply of material, society must ensure that its production is distributed in order to maintain continuous production and the desire to continue working.

These two tasks are at the head of the economic problem that we find everywhere. Therefore, to stabilize this economic problem and accomplish these tasks, we distinguish three solutions that are: by tradition, by command, and finally by the market. For centuries, various societies have used these three solutions to accomplish tasks and solve the economic problem. The first one: is tradition is the oldest technique and the main stabilizing force of societies. It consists in making sons follow the same career as their fathers. This succession allows the transfer of skills from generation to generation and also ensures society has enough working force to perform the tasks required for production and also solve the distribution problem. Heilbroner argues that even in societies that do not necessarily use tradition, custom plays an important role in solving the economic problem. Because of the customs, people have a specific type of work they want to do.

Then we have the second method which is by command. It is a method that started back several centuries and consists of a leader in charge of the economy, who dictates on the tasks to be performed. So, the leader is the one who decides everything, the different people who perform different tasks to provide the goods and services that society needs. This solution is very effective to solve economic problems, especially in difficult times. This solution can have a positive impact and a negative impact in the sense that there is a possibility of improving or reducing the economic efficiency of society. Finally, we have the third method which is the market. This method allows society to secure its own supply without having much recourse to tradition and command. That is, this method allows the economy to regulate itself through the mechanism of supply and demand.

Heilbroner came up with the conclusion that economics is not a physical and technical problem with nature, nor a problem of scarcity and a problem just for individuals but is a human problem. This is because members of society have unlimited needs because they always want more and more. Indeed, society also has non-fixed desires that change all the time. We also note that the performance varies according to the human skills and also according to the energy with the production and the distribution are carried out.

When we hear the word economy, we all tend to think that it is related to the wealth of individuals or nations and that its main purpose is to maximize wealth. But in reality, the main objective of the economy is not to maximize wealth but rather, to provide the goods and services that society needs and also to solve the economic problem by archive production and distribution tasks. As far as human nature is concerned, we are used to thinking that human beings are powerless as an economic individuals, but contrary we understand that they are the ones who have control because they are the ones who constitute a demand for goods and services, and it also because of them and how they decide to perform the work that the production and distribution result varies. Finally, in the case of the history of human beings, we tend to believe that people in developing countries live better and have economic independence, whereas it is quite the opposite. These people rely on other people to do their work; therefore, they lack autonomy. This is why I believe that the people of underdeveloped countries live better in the sense that they have a certain economic independence.