Topic 14: My Future as an Economist

I used to think that economy is boring: who cares about the theories when you pay the prices? But as the materials we covered grow, I gradually realize that purchasing an item is not only simply paying the money. It involves a more complicated process of manufacturing, taxing, and the flowing of the money. The basic concepts of economy are not only related with other subject, but also appeared in our daily life. Buying an item from a store might be a simple decision for a consumer. Yet when the decisions of all consumers gather, it brings a huge impact on the demand, increases the economic growth, and thus makes the government to do actions. At the beginning of the course we were introduced to some fundamental ideas, however, as the class went further, we received more and more complicated information. Although in the college I am not aiming for an economic major, learning high school economy definitely benefits at a certain degree. I would prefer to develop more detailed concepts in microeconomic since it relates more to personal economic application than macroeconomic does. Even I will not be an economic major, knowing how the tax system works is essential, after all.

Topic 13: Supply or Demand?

I prefer the government to intervene and stabilize the economy by using Demand-side policies.  Demand-side policy focuses on government intervention to shift aggregate demand in or out depending on whether unemployment or inflation is the most pressing issue. The government can adjust the aggregate demand by either change the tax rate or changing government spending. I think using demand-side policy is more effective in keeping the economy stable because what matters the most is what’s the consumers thinking about (since they are the ones who pay the money). Government can decrease the tax rate in order to increase the demand for purchasing. The government can also increase its spending to stimulate the demanding. For example, in the 1930s depression, President Roosevelt increased the government spending for constructing infrastructure thus provides job opportunities for civilians. In the end, it showed that it did work. Meanwhile, demand-side policies have their weakness: time lags. Demand-side policies are useful for getting out of a recession, but by the time the government is able to determine where the country's economy is located, it is too late to fix things. Congress is too slow to act. Government policies often come too late and it can cause inflation.

Topic 12: Role of the Government

When the term liberalism first introduced to Western economics, many Western countries adopted this idea and became what they are now--strong countries. I think government indeed should believe in market, putting their hands out of the economy. Their role is only limited to keeping people safe, defending the country's borders, and providing a fertile environment for markets. With the hand of government interference “removed from markets, the invisible force of supply and demand can work out the most efficient patterns of production, exchange, and consumption” (Goldstein & Pevehouse 286), prosperity would be brought to people. One recent example of government interference causing inefficiency is the Taiwanese taxation of capital gains on securities. The government put tax onto the stocks, so when stock increase its value to certain points, stockholder have to pay the tax. The government set this system is primarily for “social justice”, which wealthier people have to afford more tax. Yet, it turns out that people are discouraged to participate in economic activities (since they have to pay more money) and the government can’t earn the revenue from this system because everyone will sell their stock before it cross over the set point. As a result, the best way for government to deal with economy is leave it along.

Topic 11: Unemployment

Jobs that are more resistant to unemployment are the ones that the society needs. Careers such as doctors, cooks, engineers…etc. are the ones people need. People would always get sick, would always need food, and would always want more advanced technology. As long as people want to live, the demand exists. Workers in those fields thus are hard to be replaced. Oppositely, jobs are less resistant to unemployment are the ones that don’t require skills and easy to be replaced. Since everyone can do it, the employer can be relatively easier to find cheaper worker who wants to do the job. As a result there is a higher chance for the worker to get fired at any time. For my future career I want to be a psychologist. As people’s physical needs are fulfilled, they start to require cares for mental states. Since psychological treatments gradually become the society’s need, psychologists might be more resistant to unemployment. Yet, one concern is that there are more and more people study in this field, which increase the supply and make the competition harder. It raises the potential risk for unemployment. Despite concerning if I can survive by doing that career, interest in studying psychology plays an important role in motivating and pursuing me of being a psychologist.

Topic 10: How to Boost My "GDP"

Productivity refers to the ratio of the amount of output produced to the amount of input. It means how many products a labor can produce. There are 3 factors that could contribute to the economic productivity: quality of labor, technology and innovation, and energy costs in the financial market. As a student, increase one’s productivity by the quality of labor. Increase the quality of students means that they should gain more human capital such as paying attention in class, reviewing after learning, and going to cram schools. Paying attention and reviewing enable students that they are processing and retrieving the information. Going to cram school makes sure the students can re-learn everything just in case they missed it in class. Students could also increase their productivity through the use of advanced technology. For example, computer is one of the equipment students now have to take with them. Computer and internet bring convenience to information research and discussion. Comparing to go to a library and search for books, computer is much quicker, allowing the students to do more work in a less time. Lastly, students can enhance their productivity by lower energy costs. Lower energy cost indicates that students can use electricity for a longer time. Students can study comfortably in a room with air conditioner, sufficient light…etc.

Topic 9: Financial Markets

I would be most likely to invest in stocks (50% of my investing money) and pension accounts (50% of my investing money). Stock is a share of ownership in a corporation. Stockholder can receive dividend, the part of a corporation’s profit that is paid out to stockholders. Investing on stocks is risky. Yet it has high returns. It could either result in losing the money or earning the money. Despite the high risks and high returns, investing your money on the stock might be the fastest and simplest way to earn potentially large money. Earning money from stock investment is greatly depending on the correct evaluation of the company’s performance, the condition and situation in the market, and a little bit of luck. Driven by greedy, people always fail to earn money due to the fact that they often over-estimate the growth of the stock’s value, resulting in not selling the stock while its value falls in the next day. As for pension accounts, it is fairly easy to earn the money. You just need to put the money in the account for a certain time; the interest will be added to your original money. However, the interest rates are often small; the returns are low. Nevertheless, pension accounts might be the safest way to ensure you will earn a profit from this investment.

Topic 8: Money

To me, money not only represents the medium people use to exchange goods and the ability to afford goods, but also represents the national identity of a country. Money is both economic and political. Money is characterized by its uniformity, divisibility, durability, portability, scarcity, and acceptability. Money has to be uniform for the sake of convenience when exchanging. It also needs to be divisible when talking about trading. Durability and portability make money last a certain amount of time with stability and people may use it everywhere. Just as every other goods and services, money is scarce; people always need to make choices of what to buy, how much is it…etc. Also, money has to be accepted by everyone so people can compromise on the value of what they are selling. I often use money to buy things I want, or sometimes “loan” it to my sister and earn some interests. Monthly pocket money and Chinese New Year events, especially playing ma-jiang, are my primary resource of money. I would consider money as a very important aspect in my life. When I just simply turn on a light in my room, I need to pay for the electricity. When I go to bathroom and wash my hand, I need to pay for the water. Without money, it’s pretty hard to live. I am satisfied with my condition right now. I don’t need excessive money, sufficiency is enough. Though money cannot buy everything, without money, you cannot do anything. I can basically do anything for money as long as it is not illegal nor against integrity.