Verified Document

Economy Moves In Cycles. There Term Paper

The unemployment rate for January 2013 was 7.9%, in December it was 7.8%, this appears to be a deterioration; however, it is usual for unemployment to increase in January as seasonal jobs disappear. Looking at the rate in January 2012 it was 8.3% and in January 2010 it was 9.1%, therefore unemployment rates are decreasing slowly (BLS, 2013). The consumer prices index also shows an increase; in 2012 it rose by 1.6%. Overall, there is an improvement, from a time that has been defined as a recession, the growth is slow and constrained, but expected to improve further, therefore the current economic stage is that of a recovery, or early recovery.

Question 2

The traditional method of assessing the economic growth is by measuring the GDP, with the underlying assumption that where there is growth in the GDP there will be an increase in welfare, with the measure usually being the GDP per capita. The basic idea is that when an economy is growing there will be benefits to all segments of that economy; the increase will result in increasing wages and increasing taxes. The theory of the multiplier effect and the trickle down effect are also assumed to increase welfare throughout a society, even if not all members are able to benefit proportionately....

The benefit is also believed to occur as the increased government income may then be used to increase the welfare of citizens, supporting spending on areas such as healthcare and education, which have a direct impact on welfare.
The problem with the assumption is that it may not always be correct. Economic growth is not always equally spread across a society, for example, looking at the growth seen in China in recent years it is focused on the industrial regions, while the rural farmers are seeing little real growth or welfare. The issue is not only that of growth, but where the growth is taking place and the way it is distributed in an economy. The GDP is a single measure; it is an easy to use measure which is perceived as objective, all of which make it attractive to statisticians and economists. However, from a social perspective it does not reflect the distribution of the wealth or any improvements in welfare; only that the output has increased.

There are alternate approaches that may be used instead of GDP to assess a nation, which are likely to give a more accurate indication of the welfare of the citizens. One measure is the index of sustainable economic welfare (ISEW) developed by Daly and Cobb (quoted Stockhammer et al.,

Cite this Document:
Copy Bibliography Citation

Related Documents

Economy -Srm Today's Business Environment
Words: 1617 Length: 5 Document Type: Essay

The successful firms have the war chest, and often this was acquired through strong long-term planning. Thus, successful firms have the ability to build upon that success during economic downturns, which sets them up to be in an even stronger position when the next downturn strikes. Works Cited: Becton, B., & Schraeder, M. (2009, January). Strategic Human Resources Management. Journal for Quality & Participation, 31(4), 11-18. Retrieved May 5, 2009, from

State of the US Economy: Economics
Words: 2662 Length: 8 Document Type: Research Paper

Economics: The State of the U.S. Economy Cousin Edgar, a global investor, is seeking to capitalize on the thriving gasoline industry and the rising world demand for oil by purchasing several gas stations in the U.S. market. Inspiring his interest is the high price of gasoline, which he reckons will rise even higher in the near future, thanks to the urbanization and industrialization currently being witnessed in the developing economies of

Economy of Latin America
Words: 2628 Length: 8 Document Type: Term Paper

Economy of Latin America: Short Overview The economic situation of any specific geographic and geopolitical area is an integral part of the overall "picture" of the state of that area. Although much is said about the increasing "globalization" of the world economy -- that, essentially, the individual market areas of specific countries and regions are moving toward a single, world economy, there remain significant economic trends and pressures within varied geo-political

Role of SMES in the US Economy
Words: 3171 Length: 10 Document Type: Essay

Small Business Act of 1958 and Contribution to Small-Scale Businesses to the U.S. Economy Small-scale businesses have been accepted globally as instruments contributing to economic growth and development. Governments in many developing countries have adopted comprehensive efforts and policies aimed at improving the performance of small-scale businesses that have fallen short of expectations. Small-scale businesses face significant challenges that hinder their abilities to contribute to optimal economic growth and national

Obamacare Good for the Economy
Words: 3735 Length: 10 Document Type: Research Paper

Obamacare good for the economy? The issue must be looked at from three points-of-view, One the development that goes on in the health care and how the policy ahs affected the health care industry and particularly various sections of the society, secondly the economic changes and developments that have come about in the medical care industry, and the burden and changes in the nations economy as a whole and whether

American Economy After September 11,
Words: 2140 Length: 7 Document Type: Term Paper

Another trend that makes the American economy seem weak after September 11th is a change in spending habits. Many economists attribute a change in retail spending to the aftermath of September 11th when really it mostly reflects an evolution in the retail industry. Over time the American consumer's needs have changed and so have the demographics. For instance, "women are the driving force behind retail purchases" (Six Months, 2002) as

Sign Up for Unlimited Study Help

Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.

Get Started Now