Resources: National Bureau of Economic Research; Principles of Macroeconomics: Ch. 1, 2, 3, 4, 5, 6, and 7
Scenario: Your organization's CEO is concerned that members of the strategic planning committee are not familiar with current economic thought and principles. The CEO has assigned you the task of developing a report to introduce some of these thoughts and principles.
Develop a 1,050-word report to the members of the strategic planning committee explaining the following information:
How economists are both scientists and policymakers and what principles society uses to allocate its scarce resources.
Using the circular flow model, explain the flow of money and goods in an economy.
How the economy coordinates society's independent economic actors.
A country's gross domestic product (GDP) and how it is defined and calculated.
How the consumer price index (CPI) is constructed and why it is an imperfect measurement of the cost of living.
Format the assignment consistent with APA guidelines.
• How economists are both scientists and policymakers and what principles society uses to allocate its scarce resources
Economists are scientist because they development models and hypotheses that can be tested by using data. The models result in predictions, and sometimes these are off the mark, remember, when humans predict, God smiles. Data allow economist to describe what people actual do, this is called positive economics, for examples, by how much does gasoline consumption change if the gas tax is changed? Economists also recommend what ought to be done, called normative economics. For example, should the gas tax be changed? What are the effects of legalizing abortion (positive)? Should abortion be legalized (normative)? Perhaps one of the major contributions of economists is that they contributive to identifying winners and losers from public policy changes, think increasing the minimum wage, and private market changes, think the sale of Budweiser to a foreign company. Private markets are an economic institutions that allocate scare resources through the price system. The rule of law to protect property rights ( I sell my labor, get paid, and buy a flat screen tv, it's my tv that's what gives me the incentive to work) and enforce contracts is essential for a well-oiled market. Political institutions can wreak havoc on markets, think North Korea and Venezuela, or improve markets, think the federal clean air and water acts. The economic way of thinking allows one to identify winners and losses when resources are reallocated. It is almost never the case that the proposed change will have only winners. When you hear it's in the public interest, ask the speaker to define the public!
• Using the circular flow model, explain the flow of money and goods in an economy
A circular flow model is a diagram that is used to represent the monet...
How economists are both scientists and policymakers and what principles does society use to allocate its scarce resources
Economists are scientist because they development models and hypotheses that can be tested by using data. The models result in predictions, and sometimes these are off the mark, remember, when humans predict, God smiles. Data allow economist to describe what people actual do, this is called positive ec...
The Ten Principles of Economics
Principles of Macroeconomics
How Economists Are both Scientists and Policymakers and Principles Society Uses to Allocate Its Scarce Resources
Economists are relevant to scientists because they also take a systematic approach to questions, ideas, and theories. Economists often depend on observation and theories. In several occurrences, economists apply the same style of thinking and techniques just like physicists, chemists, and mathematicians. The goal of most economic happenings is policy analysis. Economists are also relevant to scientists because they rely on data too. They develop models and hypotheses that can be tested using data. Data allows the economists to make noteworthy predictions. One example is how a decrease fuel prices affect the dollar. Economists can be considered as scientists since they propose theories using graphs, charts, and mathematical models of the economy. Economic theories are further tested to make sure that they do a proper job of matching the characteristics of the economy. Economists are policymakers that can be used as the voice of the government by making critical decisions that may affect the country in a variety of ways. It is important that they advise the government on economic impacts of increasing minimum wage or foreign debt on the nation’s economy.
Some of the principles the world uses to distribute infrequent resources can include, trading of certain possessions. Making choices to trade mostly consist of exchanging something for another is the first principal. The second principle will be choosi...