Macro paper Essay Example | Topics and Well Written Essays - 2000 words

Macro paper - Essay Example I chose the chapter about economic growth (chapter 16) because I believe that it would be most useful to use that topic at this time since the global economy has been experiencing a downturn in the past months. In chapter 16, the different indicators of growth are discussed as well as different ways to illustrate growth. I find these aspects interesting since there are, indeed, a lot of ways to show economic growth. For example, the use of a Production Possibility curve to measure growth is a common tool. This chapter says that in order for growth to occur, the curve should execute an outward shift. But I think it cannot be applied to all countries. Maybe it is applicable to developed countries because it is easy for them to shift to a higher Production Possibilities Frontier (PPF). In developing countries, however, economic growth means moving from inside the PPF to reach the point along the PPF (Crafts 139). Also, growth will not always occur just as long as the PPF curve shifts ou tward. According to the Solow Growth model, growth will start to slow down as the economy approaches its steady state level (Crafts 140). Just like in microeconomics where there is the law of diminishing marginal utility. Although Solow did not mention about a diminishing economic growth, the steady state level of an economy is like the satiation point wherein growth will slow down. Also, this topic brought the study of macroeconomics to a new level since it does not only talk about the usual AS-AD curves in macroeconomics but it also tackles the "society" part of economics. Yes, it discusses about the Aggregate demand and supply and the Production Possibility curve but it enables us to understand the global economy in a broader perspective. "The Battle of Ideas": A Macroeconomic Perspective In the first episode of Commanding Heights, The Battle of Ideas, the contrasts between Keynesian economics and Austrian economics are very noticeable. From Lenin's revolution against the global economy to Von Mises' free market. During the World War I, Lenin was against the free market and even said that globalization exploits men. Communism took over Russia. The state had implemented heavy public intervention. When John Stalin came, the idea of central planning was introduced. The government had so much power over wages and prices. This was the main idea of Keynesian economy. Public intervention is needed in order for an economy to develop or attain growth. On the other hand, there's this Austrian economics that constitutes the laissez faire approach to the economy - that free market is essential to attain a good economy. But what is really appropriate in order for an economy to grow Is it the Keynesian or Austrian In the world today that globalization is so prevalent, is it really beneficial for a country to apply the Keynesian thought of heavy public intervention Well, lessons from the past may have the answers to that. In the Battle of Ideas, when Lenin decided to impose heavy public intervention, the Soviet Union did not really prosper at all. Although communism was rampant in their time, having the government

Business as a form of premeditation and the expectations Essay

Business as a form of premeditation and the expectations - Essay Example This research will begin with the statement that going through the state of a business is one of the contemporary and most recognized ways through which modern-day business people recognize the strengths and weaknesses of a certain business. The business under review, in this case, is a small business, a wine shop. It is important to go through the general situation that the business thrives in an effort to understand the best way to manage it. The size of the business is generally small and deals with the sale of wines. The large part of the business can be sighted after the first entrance to the shop as it does not have multiple doors except one leading to the storage room. There are racks present in the premises where the wines are stored until customers come to purchase it. The business is in an open place and thus there is sufficient lighting. Moreover, there are also bulbs in the premises since the sale of wine goes on to the night. There are two assistants who assist in the or dering and the arrangement of material in the premises. In addition, there is a telephone for the customers who might want to book a certain brand of wine. The business in question is rather thriving in an environment that has a lot of active customers. This is got from the manner in which it has managed to have a steady flow of sales per unit. This one of the aspects that keeps a business alive and conformation with the environment generally comes in as another positive chip. The breakeven point is recognized as the point in business where the revenue that the company makes is equivalent to the amount of expenses it incurs. In the stated business, the breakeven point is high. This is from the fact that the company had to sell whole 71000 units in an effort to have the small margin that exists. The margin between the revenue and the expenses is minimal at 30 for every unit and this sets in as a risk for making deficits to the company rather than the large profits that every business speculates. The business itself is in a proper category to buy even more alcohol; however, the amount of money that it makes is not sufficient enough to make a large investment such as the acquiring of another staff member. Having seen the shallow margin that the business makes has implications for the business. These implications come in as both positive and negative regarding the time it takes. If the business has short term goals, the small margins cannot come in handy in their fulfillment. However, in the accomplishment of long term goals for the business, this can work as cumulative amounts of money would get retained in the business after deduction of the general fixed costs that are the rent, staff costs, telephone and others. Going through the profitability of the business is another major aspect to bring in when identifying the actual stature of the business (Barrow, 2011,57) Looking at the sales that the business makes, it is clear to state that the profitability of the business is in line with what a small business of the sort. This is from the fact that a business entity such as the wine shop managing to have 20 Euro profit margins per unit is great. When that amount of money is multiplied with the amount of units sold in a year, the total exceeds initial capital investment by far. Understanding the liquidity of the company is another aspect that a company ought to consider when going about the daily running (Blackwell, 2008, 75). This is from the fact that for a business to keep on running, it is important to ensure that in case of anything the amount of money lost is not much. The business is well set in this from the previous fact stated regarding the amount of money that the business makes in a whole year. The wine industry is one industry that is always up from the fact that it does not have seasons and is not affected by factors such as weather. If the