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Economics Problems From A Broader Perspective, We Term Paper

¶ … economics problems from a broader perspective, we need to apply macroeconomic principles. These principles help in understanding collective problems that various industry or countries are encountering and the role government can play in this connection. The paper studies current economic problems in the Transportation sector and explains how levels of supply and demand affect the demand curve. MACROECONOMICS AND TRANSPORTATION SECTOR

Macroeconomics deals with economy on a larger scale and studies the principles of economics as they pertain to the whole industry and not just one firm. This helps in understanding national economic problems of inflation, unemployment, slow GDP growth, lower productivity etc. Therefore it is important to apply macroeconomics principles when we want to study and understand the problems being encountered by any economic system. For example in these days of slow growth, we notice that United States economic problems can be better understood in the light of macroeconomics than microeconomics. This is because we are currently encountering economic obstacles in almost all industries and their problems are collectively hurting the entire economy of our country. Let us focus on the transportation industry for example and we would notice that since the tragic events of September 11, the revenues for this industry have plummeted significantly. This is because travelling rate has witnessed considerable reeducation, as air transport is no longer considered safe. It is very important to bear in mind that it is not only aviation industry, which is suffering because of September 11 attacks, but also the transport industry in general is weathering...

The impact of this is being felt by air cargo service industry, which plays a dominant role in the businesses of major courier and shipping companies such as FedEx, UPS and DHL. In the last few months, we have noticed a sudden decline in the revenues of FedEx and UPS as both suffered from decreased consumer confidence. Consumers are no longer willing to blindly place their trust in any company and its shipping system and this is leading to improved security measures in every major shipping and courier firm. FedEx and UPS are both working hard to install sophisticated security equipment to screen all security packages and send an email to the recipient prior to delivery to inform them about the package and its exact delivery date. This helps in reducing fear, which is associated with opening unsolicited packages. Despite all these security measures both FedEx and UPS maintain that business has fallen considerably after the terrorists attacks last year and even during the holiday season, American chose to spend less on gifts which resulted in decreased revenues.
We must not forget that economics is all about choices people make everyday and deals with their behavior about selecting the best service or products when alternatives are available. The modern definition claims economics is, "The scientific study of the choices made by individuals and societies in regard to the alternative uses of scarce resources which are employed to satisfy wants." (See Ref 1) This definition indicates that economics is solely and intricately connected with satisfaction of wants, which in turn calls for an organized system of supply and demand. 'Demand curve' indicates the…

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Definitions of Economics, http://www.cr1.dircon.co.uk/TB/1/1.1.1.htm

Justin Fox, What In The World Happened To Economics? Fortune, 03-15-1999, pp. 90
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