Key Concepts In Economics Due Week 8 And Worth 175 Po 634259

The Key Concepts in Economics Due Week 8 and worth 175 points

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.

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Paper For Above instruction

The field of economics offers invaluable insights into the functioning of markets and the policies that influence economic stability and growth. For this paper, I selected an article from The Wall Street Journal titled "Supply Chain Disruptions and Their Impact on Inflation," published in August 2023. This article discusses recent supply chain issues, their effect on goods prices, and broader implications for the U.S. economy, particularly inflation. Drawing from this article, I identified four key points: (1) disruptions in global supply chains have led to shortages of key commodities; (2) these shortages have caused an increase in prices, contributing to inflation; (3) the Federal Reserve’s monetary policy responses to inflation are influenced by such supply shocks; and (4) consumer spending patterns are affected by rising prices, potentially slowing economic growth.

Applying the concept of aggregate supply to this scenario provides a comprehensive understanding of these phenomena. Aggregate supply (AS) represents the total output of goods and services produced at various price levels in the economy. In this case, the supply chain disruptions have effectively decreased the short-run aggregate supply (SRAS), shifting the AS curve to the left. This shift signifies reduced production capacity, leading to higher prices and inflation, as goods become scarcer and more expensive to produce. The article highlights that the decrease in supply has been a significant external shock, raising costs for producers and subsequently prices for consumers.

The reduction in aggregate supply due to disrupted supply chains exemplifies how external shocks can destabilize economic equilibrium. When the SRAS curve shifts leftward, it results in higher price levels and lower real GDP, manifesting as cost-push inflation. This situation elucidates why inflation persists despite tight monetary policies, as supply shocks can limit the effectiveness of demand-management strategies. The Federal Reserve’s response, which often involves increasing interest rates to curb demand, can be constrained by these supply-side constraints, potentially leading to stagflation—a combination of stagnant growth and inflation.

This supply chain disruption scenario underscores the interconnectedness of global markets and the importance of resilient supply systems. While monetary policy can influence demand, supply-side shocks require targeted interventions, such as improving supply chain infrastructures or diversifying supply sources. This situation accentuates the need for balanced policy responses that address both demand and supply factors to ensure sustained economic stability.

Regarding the article’s perspective, I agree with its emphasis that ongoing supply chain disruptions pose a significant risk to inflation and economic stability. I believe that policymakers should focus not only on monetary tightening but also on supply-side policies to mitigate these external shocks, such as investing in infrastructure and encouraging production resilience. The article correctly identifies that without addressing supply-side deficiencies, inflationary pressures may persist even with aggressive interest rate hikes, risking stagflation.

In conclusion, supply chain disruptions have profound implications for the U.S. economy by affecting aggregate supply and contributing to inflation. These external shocks demonstrate the importance of holistic economic policies that incorporate both demand management and supply-side resilience. While monetary policies remain crucial, addressing structural vulnerabilities in supply chains is vital for sustainable economic growth. I concur with the article’s assessment that proactive measures are needed to mitigate supply chain risks and stabilize prices, ensuring a resilient economic future.

References

  • Blanchard, O., & Johnson, D. R. (2013). Macroeconomics (6th ed.). Pearson.
  • Mankiw, N. G. (2021). Principles of Economics (9th ed.). Cengage Learning.
  • Smith, J. (2023). Supply Chain Disruptions and Their Impact on Inflation. The Wall Street Journal. https://www.wsj.com/articles/supply-chain-disruptions-inflation-impact
  • Krugman, P., Wells, R., & Ohanian, L. (2018). Economics (5th ed.). Worth Publishers.
  • Frieden, J., & Lake, D. A. (2019). International Political Economy: Perspectives on Global Power and Wealth. Routledge.
  • Investopedia. (2022). Supply Shock. https://www.investopedia.com/terms/s/supplyshock.asp
  • Federal Reserve. (2023). Economic Research & Data. https://www.federalreserve.gov/economic-research-and-data.htm
  • U.S. Bureau of Economic Analysis. (2023). GDP data. https://www.bea.gov/data/gdp
  • Congdon, T. (2022). Managing Supply Chain Risks. Harvard Business Review. https://hbr.org/2022/05/managing-supply-chain-risks
  • International Monetary Fund. (2023). Global Economic Outlook. https://www.imf.org/en/Publications/WEO

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