Naked Economics Essay

Describe the Federal Reserve System. How is it structured? How does it work? What is its role in the economic policy? Cite one example where Fed policy was applied and what was its impact on the economy.

The main point of chapter two is to explain why economies do not have a fixed number of jobs regardless of manpower. This is a common misconception whereas an increase in the manpower of an economy will increase the unemployment rate. However, due to large numbers of migrations that have occurred recently, real world experiments can be observed to understand the impacts. What has been learned from these events is that a reactive economy can handle fluctuations in the size of the workforce satisfactorily. The Mariel boatlift is a good real world example of a large migration from Cuba to Miami had little impact on employment and wages in Miami. The economic explanation for this illogical occurrence is due the ability the Miami economy was

Describe the creation of the Federal Reserve System and its role as agent and bank regulator;

The Federal Reserve, Bureau of Labor Statistics, Department of Labor, Department of Commerce and Treasury Department play crucial roles in the value and availability of money in the USA economy. First, the Federal Reserve is the central bank of the United States. It is run by a Board of Governors appointed by the president and serves as a bank to banks. It performs five general functions to promote the effective operation of the U.S. economy. One, it conducts the nation's monetary policy to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. Second, it promotes the stability of the financial system and seeks to minimize and contain systemic risks through active monitoring and engagement in the

Over the past few years we have realized the impact that the Federal Government has on our economy, yet we never knew enough about the subject to understand why. While taking this Economics course it has brought so many things to our attention, especially since we see inflation, gas prices, unemployment and interest rates on the rise. It has given us a better understanding of the effect of the Government on the economy, the stock market, the interest rates, etc. Since the Federal Government has such a control over our Economy, we decided to tackle the subject of the Federal Reserve System and try to get a better understanding of the history, the structure, and the monetary policy of the power that it holds.

6. If you have a private-ownership right to something, what does this mean? Does private ownership give you the right to do anything you want with the things that you own? Explain. How does private ownership influence the incentive of individuals to (a) take care of things, (b) conserve resources for the future, and (c) develop and modify things in ways that are beneficial to others? Explain.

First, I will explain the role of empowered institutions and countries in limiting the economic activities of developing countries, impeding on their ability to survive. Afterwards I will explain the obligation people in privileged positions have to improve the lives of those in compromised positions, at a certain degree of self-sacrifices. Finally, I will critically analyze and disprove the counter argument, which attempts to relieve us of the aforementioned duties, by discrediting the roles of institutions and developed countries in the prolongation of impoverishment.

The Federal Reserve System is often referred to as “the Fed.” It serves as the nation’s central bank and arguably plays the most crucial role in the U.S. economy. It is the most important regulatory agency in the U.S. monetary system and is usually considered the monetary authority. The Fed has several responsibilities and performs several functions. There are a few theories documented that challenge whether or not the Federal Reserve System exists the way it is defined.

6. Based on the statements presented in this critical issue, which author do you agree with? Why?

7. Analyze Kennedy's "report card" on page 175. To what extent for you agree? Explain.

The main problem at issue in the article is that the United States (U.S.), as a country, are still largely employing the Gross Domestic Product (GDP) to measure the welfare of the nation although the welfare of a nation can scarcely be inferred from a measurement of national income.

This section highlights a very important topic as it points out the current focus on the urban elite. The urban elite make up a relatively insignificant portion of potential customers worldwide. If companies can find a way to serve even the poorest of customers, growth potential would be practically unlimited and success all but guaranteed. The focus on lower pricing is an interesting and rather amusing point. Companies like Wal-Mart who have been chastised for their efforts to continually cut prices at all costs may, and more than likely have helped the global economy in the long run when it comes to cost cutting efforts because companies Wal-Mart deals with have already started to focus on how to be as cheap as possible.

Sachs supports the discussion topic that development of Third World countries is only possible if the developed countries provide financial support to them. “Africa needs around $30 billion per year in aid in order to escape from poverty” (Sachs, 2005: 309). He believes that a society needs external help to be in track when it falls into deep crisis (Sachs, 2005: 130). According to Jeffrey Sachs, foreign aid is the only solution for the poor countries to eradicate extreme poverty and to break down the ‘poverty trap’ cycle (Sachs, 2005: 245). Sachs is very optimist about that, more aid, forgiveness of debts, better trade terms policy and more access to technology from West can help to eradicate extreme poverty of rest by 2025. The aid should be spent on infrastructure development, disease control and market reforms

5. In another words, the underdevelopment of weak Third World countries is directly related to, and makes possible development of the powerful countries of the industrialized core.

Goal: “That the essential trait of the Third World was its poverty and that the solution was economic growth and development became self-evident, necessary, and universal truths. This chapter analyzes the multiple processes that made possible this particular historical event.” (24)