Taking A Closer Look At The Economy Essay
The Economy, what is it? To some it’s payday, to others it’s the value of their stocks. To some it’s how much interest they’re making on their money, to others it’s how low a rate they can get on their loan. The economy
could be described as a large balancing act, involving, consumers, producers, and naturally, the government. They ways in which the economy of our country affects us are not always obvious but are always there. Whether it is the value of the dollar in the world market or the price of groceries at the corner market, but most importantly what does it all have to do with the individual, what are the obvious affects?
It has often been said the dollar is what determines the strength of the United States’ economy. This is hardly accurate, a weaker dollar does not determine the state of the entire economy but does factor into it. Individually a weaker dollar simply means that one will have less purchasing power in a foreign market, which means the cost of imports from other countries has effectively gone up because the value of the dollar has diminished. However if it is looked at from a more global or national standpoint a weaker dollar can increase the United States GDP or national output. How so? When the dollar goes down in value it means our goods are priced at a lower level for other countries and respectively their goods are priced higher, this results in increased exports and decreased imports.
This lessening of the trade deficit is a positive addition to GDP.A little more common is when one is shopping and they may see something they want but say, “Well it costs too much.” When one says this they are effectively creating a demand curve for the product. The price of a product is determined by how many the supplier can make at a certain cost compared with how many people will buy at a certain price. So if one feels four dollars is too much for a product and others all over the market agree the company may have to lower it’s price to match the market demand. This balancing act of the price market in the economy is often compared to the idea of an auctioneer calling out market prices. Much like the stock market except for the product being sold. Where many are offering different prices on different goods, not forgetting all the laws of supply and demand.
So no matter what one does for a living, whether it’s working construction or being a stockbroker. It is never time wasted to spend effort to learn more about their economy and as one does all they will find are more and more ways they are affected by this balancing machine know as the economy.