The Presidential Dilemma: Trends in the United States’ National Statistics

There are several trends that can be observed when looking at the national statistics of the United States from 1929. In particular I want to address real gross domestic product (GDP), the unemployment rate as well as the public debt of the United States.

Real GDP

Several observations can be made from looking at the statistics. These include

• From 1929 to 1933 there is a decrease in the real GDP
  • The Great Depression occurred during this time period which hurt the real GDP
  • There was a rise an increase in the real GDP from 1933 until 1944
    • The United States entered a period of economic growth stimulating growing just under 1 trillion dollars in 11 years
    • In 1946 the real GDP decreases
      • Due to the fact that World War Two concludes with the United States having employed almost all of its resources in order to defeat the Axis.
      • From 1946 onwards the United States real GDP flourishes
        • Increases by a total of nearly 11 trillion dollars
        • 

 

Unemployment rate

• There have been several fluctuations in the unemployment rate
  • Factors of unemployment include chances in technology, recessions, inflation, changes in preferences etc.
  • During times of economic crises, there are high rates of unemployment
  • From 1933 to 1940 (The Great Depression and its aftermath) there are high rates of unemployment
  • In 2010%
  • During times of war low unemployment rates
  • In 1944 the unemployment rate was at 1.2% a drop from 24.90% 11 years earlier
  • Overall the rate of unemployment has remained closed to 4% on average
    

    Unemployment rate: courtesy of Wolfram Alpha

Public Debt

• Public debt has increased from 16.9 billion in 1929 and has been on a sharp incline ever since with the public debt now at over 13 trillion dollars
  • Due to constant borrowing
    

    Public Debt: Courtesy of Wolfram Alpha

Semester 1 Portfolio

Diagrams and Definitions

Evaluation

The data response are papers which require the use of CRAMPSS. In my summative data response, I showed my ability to use CRAMPS effectively and received an 8/8 for Part D which is where CRAMPSS is required. The reason I did well was because I to evaluate pros and cons as well as addressing the stockholders in the problem presented in the article. By addressing and evaluating these elements, I was able to keep it simple which I feel is necessary when going into an exam pressed for time. By simple I mean that I have an understanding of how these elements work in terms of economics is essential.

Collaboration

Here are three examples of collaboration in the first semester of economics.

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Reflections

Here and here

Improvement

We can look at my data responses in order to see improvement through the use of formative and summative assessment. Originally with the formative assessment, I made several errors that lead to me losing several points that could have been improved. These errors were both identical in that with the figures I drew, I failed to address why what was drawn occurred. I also made errors in my evaluation where I only addressed one aspect of CRAMPSS. These things learned, I went into the summative assessment knowing that these were the errors in which I need to improve. When I did the response, I paid special attention to my previous errors in order to ensure that I answered them properly and I did. This was just one instance where formative assessment has benefited me as a student of economics.

 

Showcase

Staying with my data response I want to highlight what I did well. For me I was proud of the fact that not only had I done well but also that I had learnt how to do well by originally making errors and them understanding what those errors were and finally fixing them. This data response illustrates my understanding of economics because the data response consists of receiving an article previously unseen and applying economics to the issues it raises. This shows my ability to extend classroom knowledge to real world economics which personally I think is more important (because what is classroom knowledge if you can’t extend it?). I also illustrated the correct knowledge on how to draw diagrams which up to that point I was short of confidence on doing.

 

Tennis Ball Simulation

Last Friday we did a simulation based on tennis balls to illustrate the laws of return. This simulation an increasing amount of workers (students) transferring balls from one bucket to another and had to do with all members of the class having to touch the ball before it entered the bucket with each “round” lasting thirty seconds.

Although not perfect, we did see examples of the various laws of return. Initially we saw the law of increasing demands, which meant that the more workers you added, the more you produced. This meant that the average number of tennis balls increased per worker. This productivity then slowed and turned into the law of constant returns, which meant that we stayed around the same mark in terms of the number of tennis balls transferred per worker. However all good things must come to an end and this was the case for our class. Soon it became too crowded and our productivity dropped simply because we were becoming inefficient as a class because it was too slow and too many tennis balls were dropped. This illustrated the law of diminishing returns. Overall this simulation was a good illustrative example that increased my understanding of the laws of the return. I am a strong believer in doing practical examples because I am a hands on learner.

Econ Reflection: Paper Two

In class, we recently did a couple of paper two assignments. We first did a formative practise paper to see where we were. Our most recent paper was a summative paper two test. From these tests, particularly the latest one I have learned several things.

1. Understand the needs of the question: Simply put you need to understand the computer. If you don’t know what to answer, you are going to do well. A good way to understand the demands of the question is to spend a minute reading the question and doing some quick brainstorming. By doing this, you are acknowledging what is needed and from there you can’t really go too far off topic.

Note: I learnt this because I went off topic because I didn’t do the above which meant that I didn’t spend enough

2. The structure is important: It is really important to choose a suitable way to respond to the question. There definitely isn’t a one size fits all for how to do the paper two. When you get the question (along with finding the demands of the question) give a quick thought to how you are going to answer the question and whether it is the most effective way to do so.

Note: I chose a poor structure which caused me to answer the question in not enough detail.

Combined with knowledge, the above two steps will hopefully mean that I answer the the question demands and structure this answer well.

JAL Airlines

On February 19, Japan Airlines (JAL) was “hours away from bankruptcy.” It faced a market of just $150 million with stock falling 90% in the month of February with a single share valued at just four yen. The airline has received three bailouts from the Japanese government in as little 10 years. Then, the face of Japan filed for what is Japan’s largest ever bankruptcy.

This shift from once a prosperous company can be attributed to several reasons.

1. Feather bedding in the company: JAL simply had too many employees when they didn’t need them. Part of the problem was the fact JAL had life long employees and had to pay large sums of money out to employees who didn’t need to be employed.
2. Bureaucracy: Japan is said to be a first world country with third world politics and this is a prime example. Japanese politicians made too many promises about too many airports. That led to Japan Airlines flying routes that did not need to be flown which JAL could not sustain.
3. The state of the global economy: The fact that the world was in a recession did no part in helping JAL. The demand for JAL’s services went down which lead to a decrease in the number of people using JAL leading to decreased revenue.
4. They thought that they were inelastic: This was a major prediction failure on JALs part. They thought that were inelastic but they were in fact elastic which meant that as the recession hit so did the demand for JAL and their services.

There has been no real improvement in terms of how JAL has been doing after they received a bailout from the Japanese government. They do however have until 2013 to sort themselves and get themselves back on track to become the blooming sakura that they once were.

Reflection on Data Response

I am very pleased with how my data response turned out. Initially, immediately after I finished the response, I was unsure and questioned what I had written. On return however I scored well so I must have done several things well.

I think in order to do well it is important to follow a formula for the data response. For part A you simply need to memorize definitions and if you do that, it becomes simple. For Part B and C, you simply need to draw diagrams and then explain them, particularly why. For Part D, it is necessary to use two methods in order to evaluate the task being asked. By doing all of this, you ensure that you answer what the criterea asks and that’s all you can ask for.

The Invisible Hand: Blog Post Two

Price ceiling cause shortages due to the fact that prices cannot rise above a certain point. It is because of this that demand for a product increases straining the supply for a product. When demand outweighs supply and there is a lack of supply, we see a resulting shortage. The original reason for a price ceiling is because people perceive the equilibrium price to be too high and thus, the maximum price for a product is lowered.

Shortages often result in the emergence of a black market. Black markets are goods and services that are not part of the official economy which means that they do not have to pay taxes on these goods and services. While it is often thought that black markets always alleviate shortages, this is only sometimes the case. It is not that case when someone sells the product of for a higher price due to the fact that there is the same amount of the product around. However when suppliers see the possibility of the black market more people will start to supply the product, alleviating the shortage.