Economics is the study and understanding of the economy or the system of government and people that deals with money and financial things. Because the government officials did not understand my report about the economic reforms that are supposed to help stimulate the economy, I have decided to teach them about few concepts about the economy and how it works and how they can benefit from me and use these concepts to make wise and good decisions to stimulate the economy.
The first thing I decided to teach the government officials about is economic freedom. People highly care about their economic freedom, thus, the government needs to give the consumers or people some freedom. People want to make their economic choices; their job or occupation, what they are going to do with their money, what to produce and how to produce it. Another important concept concerning the people is economic equity; people greatly value equality. Treating people fairly without discriminating between them is an important rule. Thus, discriminating on the basis of age, sex, race, religion, or disability is illegal. An example for economic equity would be minimal wage; the lowest legal wage that can be paid to a worker. People who are not very rich get affected dramatically by inflation; therefore, people prefer to have price stability. Price stability is important because inflation can damage a lot of business and people, discouraging them to get in business and this lead the people to poverty and hating the government and doing riots and strikes. Inflation can also at the end result in increasing the percent of unemployment. Full employments is when most of the society or nearly all of it are employed or have jobs, people wish for this but it will never properly be implemented.
Competition is the result of having freedom in an economic system. Competition is the opposite of the monopoly; competition is when the sellers struggle to attract the buyers or consumers. Competition exists because the individual entrepreneurs have the freedom to choose their products. Competition benefits both the seller and the buyer. Many people recognize scarcity and they want to know how to deal with it. People know that if the resources are wasted then the number of products will decrease and thus efficiency in economic decisions is a definite thing. The government must be efficient in solving the people’s problems. People hope for the economic growth to increase because everyone wants to have a luxurious and enjoyable life. Thus, they hope that the county’s economic status grow so it effects all of the people. Everyone hopes of the seven major goals that make the economy grow; full employment, price stability, economic freedom, economic equity, economic efficiency, economic security and economic growth. Other than these dreams people dream about future and future goals; people have future goals like dreaming for a cleaner environment and better future for their children. However, we do not get all of what we hope for, thus, people must plan or have a trade offs. People must have a second choice or alternative; when the government officials put a plan for cleaning the environment or improving the economy, they must have an alternative because if the plan did not work then they can use the other plan. The consumer has a big role in the economy; the consumer is the ruler of the market. When the consumer buys a product, the seller gains money; thus, the consumer decides the fate of the seller. Consumer sovereignty explains the role of the consumer at the economy. Consumer decides which product stays at the market and which don’t and the consumer moves the economy. However, the role of the government in the economy is just as important as the consumer’s role. The consumer sector is largest sector in the economy, it consists of many households and each household may contain a lot of individuals from different families that live in a different place. The consumer sector receives a huge income that is spend and consumed on needs and wants. The government acts as the protector, provider, regulator, and consumer. The government protects the economy by enforcing laws against false advertisement, monopoly, unsafe food and drugs, environmental hazards and pollution, unsafe automobiles and many other things. The government provides goods and funds to many part of the society. For example, the government provides free education. The government also regulates and preserves the competition in the market. The government also acts as a consumer; the public sector gains a lot of money (the government money). The government also puts regulations and rules; when the government puts new regulations for safety of automobiles, this causes a change in supply. It also changes the market by adding more money in the market. Thus, all of these things help in the GDP (Gross Domestic Product); where the dollar value of all final goods, services, and structures produced within a country’s national borders during a one year period increases. All these concepts are dramatically important to help the economy and to increase the GDP.
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