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Sample Essay on Useful Tools for Economic Analysis

business servicesTools of economic analysis or economic tools are used to encourage economic growth and development of its basic segments in a way that is well-matched with the range of sustainability objectives. The tools can be used by the expertise economists as well as socio-economic planners. In essence, there are basic tools for economic analysis that are utilized in the field.

Social Cost-Benefit Analysis

This tool is applied to survey all possible impacts that originally come from the urban development project. Apart from financial effects, like fees, tax, and investment costs, this method includes a range of social effects, in particular legal aspects, pollution, labor market and so on. The core aim of this analysis is to link the price to each of the effects mentioned above to weigh all of them equally. Thus, these very prices reveal the true value that the society members attach to the caused effects.

Input-Output Analysis

In this case, the matter concerns an estimation of various economic activities through the input-output model use. Taking into account that industries make use of various products that come from the other industries in order to manufacture their own, the input-output analysis is applied to capture all these transactions that are performed between the industries. Invented by Wassily Leontief, the method requires an expert to use a variety of large tables of data that describe the transactions that are performed in this or that industry area. Due to these tables, one can easily track the cash flow from one particular industry to the other.

Business Case

Meet one of the most popular tools for economic analysis – the business case. The latter is widely used by the economic experts in order to smooth the progress of the preparation of the urban plan. Business case includes strong reasoning for the project initiating through estimating the costs and revenues for the public powers and through highlighting the basic demands changes for the government services resulting from the development of the project.

Economic Impact Study

This economic analysis tool is used to trace the total area activity by venue, policy, investment within the pre-defined impact field. The vey impact field can largely improve not only some city or region, but a huge country as well. The studies of economic impact enable the specialists to comprehend the possible economic consequences of all related questions like the following: How many job positions in the region A are provided with a support from the construction segment? How much funds do the businesses and households produce within the area 3? How much tax revenues will be generated by the project 2? The scope of the questions mentioned above provides one with a clear idea that economic impact studies are one of the most commonly used tools for economic analysis in order to smooth the process of preparation of a particular robust urban plan.

In addition to the economic tools that have been discussed above, there are some other methods that are commonly carried in the economic area: financial analysis, demand analysis, feasibility study, etc.

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Essay on Investment Behavior

invest in your futureOur life is full of mistakes we tend to make anywhere anytime, even dealing with investment. Even though we are free to make use of the ultra-modern techs, there is still no person on the globe, who can do it right no matter what. This is because of an uncertainty that is an integral part of the investing. Besides, investing includes a certain scope of emotions, especially when it comes to the money that has been the product of many years of solid discipline and hard work. We will discuss some of the most common mistakes that investor’s behavior may include.

Emotional Decisions

Decisions that one makes by emotions will most likely bring disastrous consequences. For instance, when you, as an investor, purchase an investment that rises later, you may strongly believe that you were sure everything would happen exactly like that. On the other hand, in case the investment drops off, you may convince yourself that you had a sort of the sixth sense that everything could go that way as well. These switches are because our behavior has a special tendency to assemble our thoughts and ideas so that they could fit the moment.

Impatience

Investing requires a businessman to be solidly patient. Without a doubt, making a rush decision will lead to a range of troubles. We all have been taught by the society that every decision brings an instant gratification. Unfortunately, both – life and investment do not work like that. When the question is about the investing, you have to be prepared to stay patient and wait to maximize the returns.

Invest when It’s Safe

After a major loss, almost every investor has a solid fear to carry on with his business. He prefers to sell his losers and then wait till the moment they think it’s safe to get back on track. But the point is that by the time they think it’s the right moment to invest in stocks, as a rule, it’s after stocks have largely risen. Although it’s best to perform investing when the prices are low, the majority of investors are afraid of reentering the market after such a major decline. This illustrates the other big mistake that is caused by emotions. In order to avoid this, make sure to have your own set of rules that curate, when you should sell and when you should buy.

Obviously, there’s a bunch of the other mistakes you will make the other day. However, the ones described above are some of the most common within the market. To avoid your mistakes, make sure to stay patient and even if you don’t feel like that at the moment, do your best to adopt the viewpoint that goes in contrast with your own. To be clearer, never listen to the crowd. Taking into account the fact that investing requires too much emotion, a lot of investors tend to delegate their duties to the skilled advisors. This may be a good option for the individuals, who lack self-confidence.

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Supply and Demand Disequilibrium Essay

balance of paymentsBefore we delve deeper into the details of supply and demand disequilibrium, it’s necessary to clarify what the market disequilibrium actually is. What we are discussing is the market state that occurs when the supply and demand opposing market forces achieve the balances and there’s an evident tendency for the further change. In other words, market disequilibrium is a direct result of state when the market isn’t well-balanced. To be clearer, market disequilibrium is the result of the market situation, when the supply price isn’t equal to that of the demand and the quality level that is supplied isn’t equal to the quality that is demanded.

Generally, supply and demand disequilibrium happens when there’s an imbalance of the opposing forces. When it comes down to the market disequilibrium, the imbalanced opposing forces are supply and demand. Once these two forces are out of balance, a surplus or a shortage occurs, which brings on the price changes. Both – a shortage or a surplus – exist because of the inequality between the quantity that is supplied and the quantity that is demanded.

To speak of a shortage, it usually occurs when the quantity that is demanded at the moment exceeds the supplied quantity. The state described before exists in case the market price is lower than the equilibrium one. In such case, buyers have no opportunity to buy the sufficient amount of goods at the currently set price. Some consumers will definitely find the increase of the price too hard to bear. This, in turn, will make them no longer demand a particular service or product. In the meantime, the increased quantity of available service or product will be pretty satisfying for the other buyers. In the long run, the desired equilibrium will be successfully reached.

As for the surplus matter, it comes about when the supplied quantity exceeds the quantity that is currently demanded at a particular price. This condition occurs within the market if its price is above the equilibrium price. The situation is that the sellers are deprived of the opportunity to sell the desired amount of products at the current price. That is why they tend to lower the price. In response to the lower price, the buyers tend to increase the quantity demanded, which moves the market toward the quantity and price equilibrium. If this happens, excessive supply lies heavy on the downward pressure on the product price.

Market disequilibrium emerges with a shortage or a surplus for the reason that the price always changes. The very inequality between the quantity supplied and the demanded quantity incites the price changes. A shortage causes the price rise, while a surplus causes the drop of prices.

It is worth considering that shortage and surplus in supply usually have an extensive impact on the specific service or good price, as well as the overall quantity eventually sold. Various moves in the supply availability cause disequilibrium between the demands and supply levels that prevail nowadays.

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2014 Becomes Strongest Year of Economy Recovery

When it comes to the recovery of the labor market of the United States of America, 2014 was the strongest year for the country. The economy of the US has been harshly driven by the robust job gains. While the economies of the other countries stumble, the USA economy has smoothly glided through the whole year.

The Economy of the United States Started Off Sluggishly

At the beginning of the 2014, the economy of the USA started off really slow. Nonetheless, the country’s economy has finally reached certain momentum and it looks determined to get on a more self-sustaining track in 2015.

The United States Economy has gone a long way in five years since the moment, when the crisis ended, and when all business levels were disturbed by the uncertain demand prospects and it was really difficult to obtain credit. In addition to that, there was a global conflict like Arab Spring that shook confidence and unrest over the USA government debt default mounted.

The Economy Turnaround

In 2014, there was a grandiose turnaround in the area of economy of the United States of America. Local companies turn out to be more certain about the extensive business development and besides, they are more upbeat and comfortable about this expansion being sustained. In general, companies are pretty successful in what is related to ramping up hiring.

2014: Monthly Job Growth Becomes the Strongest

In the year 2014, the monthly job growth in the United States of America has reached the highest positions since the year 1999. The US rate of unemployment has gone down to 5.8% that is known to be the lowest since the year 2008, that is 1% point lower than it was a year ago.

Unemployment benefits applications have focused at the level below 300 000 for some months. This demonstrates that employers in the USA are holding off on hiring for the reason that more jobs are provided and the available workers’ pool has shrunk.

The Citizens of the United States of America

Americans have claimed that at this moment they are more confident about the economy segments of their motherland than they have been in the recent seven years. The raise of the economy of the United States of America was always on the horizon in the year 2014, experts say. In January 2014, 20 American states, as well as the District of Columbia, were slated to bring up the minimum income, a boost of $1.6 billion in increased wages for 3.1 million USA workers, according to the Economic Policy Institute calculations.

Despite the harsh winter and frozen economic growth that caught the US citizens at the beginning of 2014, the year has been undeniably the strongest one for the labor market recovery of the United States. At the same time, Americans still do not make as many purchases as they used to even though the gasoline prices seem to drop and the paychecks aren’t much bigger nowadays than they were a couple of years before.

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Economic Growth of China Hits Six-Year Low

The economic growth of China slumped to a 6-year low after retail sales and manufacturing itself cooled at the beginning of the year, stepping up pressure for Beijing to stay on track as the second largest economy of the globe. It’s recorded that the economic growth went down to 7% from the previous quarter. Since the world’s financial crisis in 2009, when the growth reached the 6.1%, that is the weakest performance. It is important to mention that much of that decline has been self-imposed – Chinese communist leaders try to push the country to amore sustainable economic growth, which will be driven by domestic consumption. However, an unexpected downturn that has been observed during the last year has also caused fears of social tensions and job losses.

Economists say that China’s economy is getting slower at the rate that the government representatives find uncomfortable. Since November the interest rates have been cut twice by Beijing, who also launched a range of special measures in order to help not only exporters, but also the other industries.  However, the economists claimed that the country still depends on the spending of the state-led construction as well as the other investment for almost a half its economic expansion. Sheng Laiyun, who takes the spokesman position for the National Bureau of Statistics, says that the country is still relying on the traditional economic growth engine. In other words, China is in a so-called transition between the new and the old models of growth.

China’s top economic leader, Premier Li Keqiang, warned that the country is faced right now with the increased “downward pressure”.

Li told economists that the country is in need of a range of regulatory changes in order to improve efficiency, nurture new industries as well as provide new jobs. Chinese leaders state that their priority nowadays is to make China’s economy more productive and efficient. However, unpredictably weak construction and trade – industries that support a great number of jobs – have prompted expectations Beijing will cut interest rates once again in order to support growth.

Back to the beginning of the year, the very first quarter is considered the weakest for the country since the world’s financial crisis, when growth went down to the point of 6.1% in 2009.

According to the government spokesman, it is not clear what share of China’s economic growth derived from investments and how much from consumptions. But Sheng also said it should be close to the previous data, when the contribution of consumption to the country’s economic growth reached about half for the very first time, rising to 51.2%.

The most recent data showed that the representatives of the International Monetary Fund cut the Fund’s outlook for the country to 6.8% from 7.1%. Soon after the World Bank trimmed its forecast for the country’s growth to 7% this year from 7.1%.

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Meet the World’s Worst Economic Policies

On the one hand, “something new” is always a good idea, but all those worst economic ideas that are being applied all over the globe can make any ship go down sooner or later.

Obama Era: the Workforce of the Public Sector Must Be Cut

While almost every small government conservative considers Barak Obama a real savior of the public sector jobs, the reality is actually next to opposite. According to the latest investigations, during the recovery the public workforce has gone down to the 600 000 level – the activities that have never been experienced before. The gap in the area of public sector jobs (the difference between the actual situation within the public sector employment and how the things would go if it had grown together with the growth of the population) is almost 1.5 million. Public spending cut will bring unprecedented consequences that will result in tons of missing paychecks.

Venezuela: Disastrous Foreign Currency Control

Chávez’s government imposed the foreign currency control, fearing that the instability of Venezuela may cause a significant capital flight. Besides, its members also wanted to control the movement of people. From the time, the citizens have had to approach the government leaders to get dollars, or, as an alternative, exchange them in the so-called “parallel market”. The currency price within the “parallel market” is free to rise and fall depending on the market forces. These actions have led to the situation, when the foreign currency – US dollar – has two prices that are absolutely different. The official or legal price is the lower one, while the second price or the parallel one shows the actual value of the currency. Venezuela absurd policies led to the truly disastrous results for the country’s economy. Who knows, maybe the cancer that has struck the national leader, will bring some kind of relief to the country?

Worst Performing Economy: Macau Wins

If you consider Ukraine or Greece’s economies leave a lot to be desired, the world gambling oasis – Chinese Macau – is in the worse shape than those countries ever been into. By means of his anti-corruption campaign, president Xi Jinping has hammered the VIP gaming in the region.  The campaign organized by the president has caused a real plunge in the gaming revenue. The latter slumped 39% in April 2015 that is an 11th straight turn down.

Ukraine: the Worst Is Yet to Come

Although the country can boast of having rich mineral and farmland resources, and it could easily get the status of a leading economy within the EU, the reality is pretty gloomy.  The per-capita GDP position is set far behind such countries as Bulgaria and Serbia. Who’s the one to blame? Poor corporate governance, corruption, as well as weak contract law enforcement by courts.

To cut the long story, economic profession is a unique opportunity to upgrade the economy level of the country. However, for some political leaders it is a chance to produce and apply some zombie ideas that will lead the country directly into crisis.

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Inflation Essay: Methods to Control Inflation

At first, let us give a simple explanation to the phenomenon called ‘inflation’. In short, inflation occurs when the economy is growing due to the increased spending. In case it ever happens, the prices are getting higher and the currency is worth less that usually. This leads to the fact that the currency can buy less than it would before. When this or that country faces with the inflation, the government is required to take a range of actions to stabilize the economy of the land. There is a number of methods that once applied can help the government of the country keep the inflation under control.

– The Control of the Wages

In case the phenomenon is caused by the wage inflation, then the representatives of the government may limit the wage growth. This can help moderate inflation. This kind of actions can help to reduce the cost push inflation as well as balance the demand pull inflation. But the problem is that it may be quite difficult to keep the inflation under control through income policies, especially when the question is about the powerful unions.

– Monetarism

Through monetarism the government of the country can control inflation as well. The representatives of this area tend to think that there is a solid connection between the inflation and the money supply. In case you’re able to keep the money supply growth under control, then you should be able to keep inflation under it as well. The monetarists would point out the policies like control of funds being created by the country’s government; tightening monetary policy and deflationary fiscal policy. But the truth is that the actual connection between the inflation and money supply is not as strong as monetarists tend to believe.

– Side Policies Supply

More often than not, inflation is caused by the constant uncompetitiveness and rising costs. Through the side policies supply one can enable the economy to get more competitive as well as properly moderate all the pressures related to the inflation. Let’s say, the labour markets that are more flexible can help to reduce the pressure caused by the phenomenon. Nonetheless, the side policies supply can take a long period of time and, what is more, is cannot deal with the inflation that is the result of the rising demand.

To cut the long story, the process of controlling inflation is an integral part of the economic activities of any country. Keeping it under control is crucial for the reason that an as unrestrained increase of the prices can lead to the hyperinflation, as well as deflation (excessive fall of the prices). Both of the situations are absolutely unhealthy for the economy, as well as development, of the land and for the overall growth of it.

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Supply and Demand Essay: Law Basics

In order to make the economy properly function, the producers are required to supply all goods that are required by the consumers. This is what they call the supply and demand law. When the matter concerns “supply”, it is related to the overall amount of goods that can be produced within the market. At the same time, “demand” is usually related to the amount of goods that the consumers want to purchase. Being combined these elements form the most important principle of the economic theory.

When one is aware of the supply and demand law, it is easier to get an idea of how the goods’ prices are set within the market. As a rule, the process if started the very moment the consumers require some goods. In case the demand is high, the producers have an opportunity charge high prices for the items they sell. Ability to earn huge sums of money makes the producers provide goods in order to meet the consumers’ demands. But according to the law of demand, in case the prices are sky high, only a small amount of consumers will ever buy the goods. This means that the demand will soon get unmet. In order to comply with the demand, the producers are required to set a price that will lead to the desired amount of sales, as well as personal profits.

The very moment that supply is getting absolutely balanced with demand, the market reaches equilibrium. At this point, all the resources are usually used at the maximum efficiency. In general, it’s not a mistake to state that the whole study of economics is mainly related to how the market economies can reach the desired equilibrium. That is why a economists from all parts of the globe spend a lot of time and efforts analyzing the aspects of relationship between supply and demand.

The law of supply and demand provides us with the explanations regarding why the individuals take these or those actions in a market economy. Moreover, it can also be used in order to predict certain economic outcomes. The producers, who wish to set the highest prices for their goods, make use of inventory management protocols and spend a lot of funds on advertising in order to encourage their potential clients to purchase their products. All the consumers, who tend to value a low price over the product quality shop at various discount shops, while the ones who give preference to popularity over the price buy goods from the retail shops at the market height.

To sum up, it is important to mention that the law of supply and demand is not just limited to the goods’ sales. It is also successfully applied when one needs to provide explanations for almost every economic phenomenon. Thus, the law of supply and demand is not only crucial for the economic theory as a whole, but it serves as a basis for the economics itself.

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How to Write Economic Crisis Essay: 10 Easy Steps!

In this article we offer 10 easy steps developed for easy writing economics essays. These tips will help you to learn that writing economics essays can be quite simple and even fun!

  1. Research.  First of all you have to conduct a thorough research on your topic in order to become an expert in your chosen field. Use an Internet connection, academic journals and books, visit the local library.
  2. Analysis. When you feel like you have a solid knowledge base, you have to analyze information you have gathered. Clearly develop the claims, write down the reasons and the evidence. Make sure you notes have logic.
  3. Braintorming. Ask yourself a bunch of questions related to the topic and provide an answer for them. Take a walk in a park and ponder over the topic you have chosen until you feel like an original idea has come up to your mind. Essay global economic crisis may seem quite a broad issue but the point is that every broad issue consists of the smaller ones you may notice all around.
  4. Thesis Statement. Take the best idea and arrange it into a clear statement so that the whole essay could be based on it. This is the main point of your work, which is sunned up in an understandable sentence. By means of the thesis statement your reader will be aware of where you are going and why. Remember, you will never generate a  top quality essay without a clear thesis statement especially if you’re going to take part in prestigious economics essay contest.
  5. Outline. Develop an outline before the essay writing. You may use sentences that include only one line to describe the essay paragraphs. Structure your essay to make sure every paragraph is unified.
  6. Introduction. Now it’s time to sit down and start working on the essay. In the introduction section you’ve an opportunity to hook your reader’s attention . The intro is the way you can bring your audience into the world of your project.
  7. The Body. If you use a standard 5-paragraph essay structure you may include 3 paragraphs. Every paragraph should be focused on one separate idea that serves as a supporting for your thesis. For instance, if you are writing an essay global economic crisis you may devote each paragraph to one single reason. Support what you write with solid evidence, facts and examples. Imagine that your reader is sitting right in front of you and speak to him as if he’s near you.
  8. Conclusion. Make a short wrap-up sentence to summarize the whole paper. You may end your essay on some interesting quotation or memorable thought. If you would like your reader to ponder over the global economics problems let him know what points he should pay his attention to.
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Essay on Opportunity Cost

Opportunity cost provides a broad view of the monetary and nonmonatary factors in making a choice (Hall, 2000). This paper examines the concept of the individual opportunity cost for pursuing a Master of Business Administration (MBA) degree. It suggests that acquiring an MBA part-time while employed, as compared to a full-time student, minimizes the payback period for the cost of education at the expense of the non-monetary demands on time, energy and family.
The paper specifies the common elements involved in making the choice between taking a leave of absence from work, moving out of town, and pursuing an MBA full-time, or maintaining a current job while enrolled in a local MBA program. It then compares and contrasts the options and finally concludes the paper with a suggested choice.

Opportunity Cost Elements

Hall and Lieberman define opportunity cost as “the value of the best alternative sacrificed when taking an action (pg. 16). They suggest every choice is a sacrifice. Yet, to what degree must a sacrifice be made between a choice of “learning while earning” and “learning while paying?”

German philosopher Friedrich Nietzsche once wrote, “When there is a choice about it, a great sacrifice is preferable to a small sacrifice, because we compensate ourselves for a great one with self-admiration, which is not possible with a small one” (Columbia World of Quotations, 1996). Acquiring an MBA, regardless of the choice of options, requires a great sacrifice. It is unavoidable. Nevertheless, a careful examination of choice elements, namely money, time, energy, and family, may minimize the degree of sacrifice (MBA.org.nz, 2002).

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