Question

1. Give one economic reason why nations fail.
2. Why was Thomas Malthus wrong?
3. What is the societal cost of adopting the Phillips Curve?
4. What is the economic curve that illustrates inherited wealth?
5. In terms of the gold standard, why was Fort Knox necessary?

Answer 1

One of the reason for the failure of nation is due to the blocking f new technologies by the elites. The new technologies are extremely disruptive. In countries like Austria and Russia faced this problem. The redistribution of income and wealth will create disparity among elites and the common people. This will increase inequality among the society. The elites having all the power in the country. The richer become riche and the poorer become poor. This will also affect the production sector. Because there is no new technologies were implemented in the low income earning industries. This will leads to stunted growth of the economy.
Thomas Malthus expected the problem occurred due to over population while the food production increased arithmetically. But Malthus prediction never came true. There have been several famines faced by several countries. All of these overcome by the specific government. Malthus failed to find the use of pesticides, machines, refrigeration and other technical advances make possible to feed enormous number of people very well. There is high level growth in the production of food supply with respect to the rise in population.
Philips curve shows the negative relation between unemployment and inflation rate. If the unemployment increases the inflation will fall down. With respect to unemployment increase the demand for goods and services will reduce. This will leads to the fall in general price. With respect to the societal cost, the rise in unemployment rate will affect the living standard of the people. The unemployment will also affect the consumption pattern, educational level of the children, medical facilities etc. of the workers. Thus the unemployment rising to reduce the inflation will affect the social condition of the workers very badly.
The economic curve shows the relation between economic growth and inequality. There is a negative relation between economic growth and level of inequality. The high level inequality in the society danger the future generation also. This caused due to the unequal distribution of the income and wealth. If there is unequal distribution of wealth the richer remain rich and the poorer remain poor. At the peck of the curve, the economy reaches its highest efficiency point without inequality in any sense.
The Fort Knox which is adjacent to the United States Bullion Depository. This holds the Army Human Resource Centre of Excellence which includes Army human resources. This will serve the gold of US. Whenever a recession occurred, it will affect the whole economy. At that time, this bullion depository can allocate resources to the country to maintain the negative growth.