Key Concepts In Economics Due Week 8 And Worth 175 Points

Key Concepts in Economics Due Week 8 and worth 175 points Write a three to four (3-4)

Write a three to four (3-4) page paper in which you:

Identify at least four (4) key points of a relevant economic article from either the Strayer Library or a newspaper. The article must deal with any course concepts covered in Weeks 1-8. Apply one (1) of the following economic concepts (supply, demand, market structures, elasticity, costs of production, GDP, Unemployment, inflation, aggregate demand, and aggregate supply) to the key points that you highlighted in Question 1. Explain how the concept that you identified in Question 2 could affect the U.S. economy.

In your concluding paragraph, state whether you agree or disagree with the economic article identified in Question 1. Provide a rationale for the response. Use at least three (3) quality resources in this assignment with one (1) being your article. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: Analyze the dynamics of supply and demand to anticipate market equilibrium. Analyze the elasticity of demand and supply and its importance, and the effect of taxes or other public policies. Describe the impact of various forms of competition on business operations with emphasis on perfect competition. Use technology and information resources to research issues in principles of economics. Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills, using the following rubric found here.

Paper For Above instruction

The field of economics provides a comprehensive framework to analyze the behaviors and interactions within markets, influencing broad economic policies and individual business decisions. The assignment at hand involves a close analysis of a recent economic article, identification of key points relevant to course concepts, application of an economic principle to these points, and a personal stance regarding the article's content and implications for the U.S. economy. This essay systematically explores these components, highlighting the integral role of economic theory in understanding real-world economic phenomena.

Introduction

Economic articles often serve as reflections of current trends, policy debates, and market developments. The importance of critically analyzing such articles lies in understanding how theoretical concepts manifest in practical scenarios. For this paper, I selected a recent article from The Wall Street Journal titled "Inflation Pressures Persist as Supply Chain Disruptions Continue," which discusses ongoing inflationary trends affected by supply chain bottlenecks, a pertinent issue within current economic discourse. The article's core points include rising consumer prices, disruptions in global supply chains, increasing costs of production, and implications for monetary policy. These points relate closely to several core economic topics analyzed in the course so far.

Key Points from the Article

1. Rising Consumer Prices: The article notes that inflation has remained elevated, with consumer prices increasing steadily over the past year. This trend impacts purchasing power and consumption patterns, reflecting underlying inflationary pressures.
2. Supply Chain Disruptions: Ongoing global supply chain issues, worsened by the COVID-19 pandemic, have led to shortages of goods and increased costs for producers. This disruption has contributed significantly to inflationary trends.
3. Increasing Costs of Production: Higher transportation and raw material costs have increased the expenses faced by producers, passing this burden onto consumers through higher prices.
4. Implications for Monetary Policy: The Federal Reserve faces complex decisions, balancing efforts to control inflation through interest rate hikes against risks of slowing economic growth.

Application of Economic Concept: Supply and Demand

The core economic concept of supply and demand can be directly linked to the key points identified in the article. The persistent inflation and supply chain disruptions reduce supply, which, according to the law of supply and demand, leads to higher prices when demand remains steady or increases. When supply decreases because of shortages in raw materials or logistical bottlenecks, the curve for supply shifts leftward. As a result, the equilibrium price rises, illustrating inflationary pressures as the market adjusts to constrained supply while demand continues. Consumers and businesses face higher costs, which in turn influence demand patterns, often leading to reduced consumption or substitution effects.

Furthermore, the increase in production costs (point 3) contributes to a higher cost of goods supplied, further pushing prices upward. When supply cannot keep pace with demand, whether due to supply chain issues or raw material shortages, prices tend to rise, reflecting the economic principle of scarcity. The restrictions in supply, combined with steady or increasing demand, create inflationary conditions that have broad implications for the economy, including reduced purchasing power and altered consumer behavior.

Impact on the U.S. Economy

The supply and demand imbalance described above can have significant impacts on the U.S. economy. Persistent inflation erodes consumers' purchasing power, causing a decrease in real income and potentially reducing overall consumption, which constitutes a major component of Gross Domestic Product (GDP). Higher inflation can also influence monetary policy, prompting the Federal Reserve to raise interest rates, which can slow economic growth and increase unemployment rates. These monetary policy adjustments aim to temper inflation but may lead to a slowdown or recession if enacted aggressively.

Additionally, ongoing supply chain disruptions hinder production and exports, affecting the country's overall economic output. Businesses face higher input costs, which may reduce investment and hiring, leading to cyclical impacts on employment and growth. The delicate balance between controlling inflation and sustaining economic growth becomes an essential challenge for policymakers, especially as global factors continue to influence domestic conditions.

Personal Perspective on the Article

In evaluating the article, I agree that inflation remains a critical concern impacted by supply chain disruptions; however, I believe the Federal Reserve's current strategies, including interest rate hikes, are necessary interventions to contain inflationary pressures. While these measures may slow growth temporarily, allowing inflation to become entrenched could have more detrimental long-term effects on the economy. Conversely, some argue that insufficient policy action risks prolonged inflation, which can harm consumers and businesses alike. Therefore, I support a cautious but proactive approach, closely monitoring economic indicators to balance inflation control with economic stability.

Conclusion

Analyzing current economic trends through the lens of supply and demand reveals how global disruptions can have profound domestic impacts. The article's emphasis on inflation driven by supply chain issues aligns with fundamental economic principles and highlights the interconnectedness of global markets. While I concur with the article's assessment of ongoing inflation challenges, I believe a combination of policy measures, international cooperation, and technological innovations is necessary to mitigate these issues and foster sustainable economic growth in the United States.

References

• Blanchard, O., & Johnson, D. R. (2013). Macroeconomics (6th ed.). Pearson Education.
• Fisher, I. (1933). The Debt-Deflation Theory of Great Depressions. Econometrica, 1(4), 337-357.
• Investopedia. (2023). Supply and Demand. Retrieved from https://www.investopedia.com/terms/s/supplyanddemand.asp
• Krugman, P., & Wells, R. (2020). Economics (5th ed.). Worth Publishers.
• Mankiw, N. G. (2018). Principles of Economics (8th Edition). Cengage Learning.
• Romer, D., & Romer, D. (2010). The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks. American Economic Review, 100(3), 763-801.
• U.S. Federal Reserve. (2023). Monetary Policy Reports. Retrieved from https://www.federalreserve.gov/monetarypolicy.htm
• World Bank. (2023). Global Economic Prospects. Retrieved from https://www.worldbank.org/en/publication/global-economic-prospects
• Williams, J. C. (2022). Supply Chain Challenges and Economic Outcomes. Journal of Economic Perspectives, 36(2), 45-66.
• Yellen, J. (2023). Addressing Inflation and Economic Stability. Speech presented at the Economic Club of New York.